Return to Transcripts main page

Quest Means Business

Israel Launches Major Operation In West Bank; Strong First Half Despite Economic Turbulence; Musk Announces Temporary Read Limits For Tweets; Zelensky: Ukraine's Gaining Around; Beijing Curbs Exports Of Critical Chip-Making Metals; Yellen To Visit Beijing In Effort To Mend Relations. Aired 3-4p ET

Aired July 03, 2023 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[15:00:29]

PAULA NEWTON, CNN HOST: So a slow day on Wall Street, to be expected. Markets closed at 1:00 PM, of course in events of that July 4th holiday.

As you can see there, yes, that's about as flat as it gets. Those are the markets, and these are the main events.

A major Israeli incursion underway in the West Bank. Palestinian officials say at least eight people have died so far.

Russia and Saudi Arabia cut oil production through the end of August.

And meet Lemon8, the new app from the owner of TikTok that is already raising security concerns.

Live from New York, it is Monday, July 3rd, I'm Paula Newton, in for Richard Quest and this is still QUEST MEANS BUSINESS.

And good evening.

Tonight, we are entering the 20th hour of Israel's largest military operation in the occupied West Bank city of Jenin in more than two decades.

The Israeli military has used drone strikes and hundreds of soldiers to target the Jenin refugee camp. It says it is disrupting a militant command

and control center.

Now, the Palestinian Ministry of Health says at least eight people have been killed. It says five of those killed were only teenagers. More than 80

others have been injured as of now. It is the second time in less than two weeks the Israeli forces have raided Jenin.

Hadas Gold has been following all the latest developments for us and she joins us now from Jerusalem.

And Hadas, what more are you learning about this operation and why represents at this hour such a significant escalation?

HADAS GOLD, CNN CORRESPONDENT: Yes, well, we just heard from the Israeli military that they had actually been planning this specific operation for

some time, and what they were trying to target they say is to remove Jenin from becoming a safe haven, they said for militants.

But this has turned into the largest Israeli military operation since 2002, since the days of the Second Intifada. The Israeli military utilizing

several drone airstrikes, hundreds upon hundreds of Israeli forces, bulldozers to bulldoze streets that they said had IEDs under them. And we

even saw tanks on the outside, outskirts of Jenin.

But still, just the sight of tanks in the occupied West Bank, of course brings to mind those images during the Second Intifada when Israeli

military tanks were literally within the cities themselves.

Now, the Israeli military saying that they were using precise airstrikes to target militants. They say they were targeting command centers. They say

they were targeting weapons sites, explosives sites, targeting IEDs to remove them, and the Israeli military is claiming that of the eight killed,

they just told us this, they said that as far as they believe that no non- combatants were killed.

They are saying that all the eight killed were militants, but we do know at least of 80 other injuries and we do understand that there are civilians

amongst those injuries. We have to keep in mind that Jenin and specifically the Jenin refugee camp is an incredibly densely populated area.

And of course, when you have bulldozers going through the cities and you have clashes going out there at the cities, civilians will be affected.

We are hearing of issues to the electricity supply, to the water supply, and now, we are hearing reports of women and children, especially trying to

leave the refugee camp because this has been going on now for 20 hours and the Israeli military saying that it will continue for at least another day

or two until they believe they have achieved their objectives.

Of course, for the past year-and-a-half, we have been reporting on the increasing levels of violence across the occupied West Bank and in Israel

itself. The Israeli military has been conducting these regular raids, they say in response to a wave of Palestinian attacks against Israelis and to

combat what they say are rising militant groups across the occupied West Bank.

But this cycle is essentially just continuing. The Hamas militant group has called on all of their members to operate against Israel in every way

possible.

Now, we did just hear from the Israeli prime minister, Benjamin Netanyahu in the last hour or so. He was actually speaking at a US Embassy event here

in Jerusalem, and he was also saying that this operation will continue.

Take a listen.

(BEGIN VIDEO CLIP)

BENJAMIN NETANYAHU, ISRAELI PRIME MINISTER: In recent months, Jenin has become a safe haven for terrorists. From that safe haven, terrorists

perpetrated savage attacks, murdering Israeli civilians, men, women and children -- as many children as they could find.

[15:05:03]

As I speak our troops are battling the terrorists with unyielding resolve and fortitude while doing everything -- everything -- to avoid civilian

casualties.

(END VIDEO CLIP)

GOLD: Now, I was in Jenin yesterday speaking with residents. We heard Israeli military drones buzzing above us, but today, the residents are

saying that they have really never seen anything like this, especially for those who weren't around for the Second Intifada.

The question, of course, will be, what will the night bring? Will we see even a bigger incursion into Jenin? Will those casualty numbers mount? And

then also, will this spill over into something much broader?

The Israeli military is adamant saying they do not want any sort of widescale major West Bank operation. They say, they are specifically

focused on the Jenin refugee camp and on what they say are their militant targets there.

But this could easily spill over again into something much bigger. We keep bringing to mind the days of the Second Intifada, and you really have to

question, we keep talking about is this another Intifada potential? We are just in one already right now -- Paula.

NEWTON: Yes, important point to be made there, especially given the calls for retaliation. Hadas Gold on the scene for us and will continue to bring

us updates on that. Appreciate it.

Now, it was in fact the first day of trading of the second half of the year and a shortened session here in the United States. It appeared most

investors, yes, they were already on holiday if you hadn't noticed the Dow steadily climbed, but finishing up about 10 points there, basically flat.

The S&P 500 ended just about in the green. The NASDAQ, though continued its winning ways, but certainly not the streak it has been noticing in the last

couple of weeks.

Now, it is coming off its best first half in 40 years it should be said, gaining 32 percent, powered, of course, by the tech giants. They are dubbed

The Magnificent Seven now. Those are the chip makers. NVIDIA shares, which have also sold 190 percent in the first six months of the year as it rode

that AI boom. The question is, you know, can markets maintain all of this momentum or will economic headwinds bite in the second half?

Now, central bankers have been furiously raising rates and most are signaling that there is still more work to be done in order to drag

inflation down to the two percent target. Consumer prices now are rising at four percent a year in the US. The EU and the UK have a bigger job ahead of

them if they want to get inflation back to their two percent targets.

Adam Tooze is a professor of history and director of the European Institute at Columbia University, and he joins me now from New York.

I'm going to need your quick take here first on the table. I want to dig a little deeper later on, but right now on the quick take, getting to two

percent inflation, do you feel that that's too much of a financial risk at this point in time for global economies? Do you think central bankers

should stick to it? And if not why?

ADAM TOOZE, PROFESSOR OF HISTORY AND DIRECTOR OF THE EUROPEAN INSTITUTE AT COLUMBIA UNIVERSITY: I think it's a really serious risk. It's a serious

risk both for the recession probability, and more generally, for the world economy at large. We have to think as the IMF was highlighting in recent

presentations, just how stressed the global borrowers are, who have been gorging on dollar credit for some time now, and those interest rates really

bite.

So a big push to two, I think right now is asking a lot. We've seen some fragility in the financial system already. I hope they go slow in that

approach to two.

NEWTON: What's the alternative, though? They have been quite dogmatic, as you know, listening to central bankers about it.

TOOZE: Yes. I don't think there's any possibility really have a serious conversation about moving away from two as the eventual target. I think,

this is all about timing. It is how high do you go in Europe and the UK, where they are not yet, I think at the peak of the interest rate raising

cycle.

Notably, in the UK, there was a big move in the last week or two, the EU, the ECB, I think, also the hawks on the board there also think there's a

lot of headroom. That is the one question.

The other one is how high and how long do they keep the rates at that kind of level? What I'm hoping for in a sense is the sort of strategy the Fed is

pursuing, which is to raise and then pause and to see what actually is going on in the economy, because if you ask the economists and the

economists are honest with us, their models do not accurately predict how large the impact of these kinds of interest rate hikes are. We simply don't

know. The econometric modeling is quite ambiguous on this point.

And so given that this is a historic hike, especially in its global extent, there's a good reason I think, for proceeding cautiously.

NEWTON: Yes. And hopefully, it might mitigate the risk to those global economies. I want to quote you here. Your quote, "If you are truly

interested in finding a better balance between capitalism and democracy, the one thing you should be about is alternatives even when it comes to

inflation."

So in terms of digging deeper into that, are you saying that not just financial stability, that democratic stability could be in jeopardy if they

go too fast to maintain that two percent target?

[15:10:07]

TOOZE: There are two different levels to this. One is that the socioeconomic impact of a very severe interest rate shock should not be

underestimated. If you're asking why populism surged in Europe from 2010 onwards, why Brexit happened in Britain, you have to factor austerity in,

and the interest rate hikes at the current moment are austerity by another name.

Andy Haldane had a great column in the FT where he said, ex of the Bank of England -- where he said, this is austerity again. It is just monetary

austerity. So that's one element. It is the real socioeconomic damage.

America right now should be celebrating its hot labor market. The fact that labor market participation of African-Americans and Whites has converged

for the first time in history. We should be celebrating that rather than treating it as a problem.

And the second level is about the nature of democratic debate. It's about whether or not we consider certain options to be on the table or not. And I

don't think we should pre-judge whether or not the two percent inflation target stands, but we shouldn't dogmatically assert that there is simply no

option to that, right? That in itself is a foreclosure of the options open or should be option -- the options that should be open in democratic

debate. We should be considering other instruments as well.

Many European states experimented with various types of fiscal policy to stabilize prices, even price controls, price regulations need to be on the

table.

NEWTON: Yes. A lot to parse there, especially given how you know, the independence of the central bankers is weighed, as you say, against that

fiscal policy.

I want to get to a point that you've laid out quite effectively in the last few months, and this is this concept of a poly crisis, right, the mutually

dependent parallel risk environment that we're all going through now.

But here's the question to you: How does AI, artificial intelligence flow into that? Is it a near and present danger to economies? Is it

misunderstood? Is it transformative? All of the above?

TOOZE: I think to connect it back to the conversation we're having, the real issue there is jobs, jobs, jobs, jobs, jobs. Does AI in the medium

term pose a very serious risk to white collar labor markets, routine white collar worker of different types? And if that is the case, and I think

there is a reason to think that it does, then the question going forward is how do we maintain that employment? Where do we find those jobs? And the

answer there is investment and various types of growth.

And this is the other reason, I think, to be worried about a severe interest rate hike and a form of monetary austerity, because that growth

that we want, the innovation that we want, that requires investment and interest rates throttle that. It is one of the ways that monetary policy

acts.

So this will be the way I think in which those two problems are interconnected. AI may be a huge boon. I mean, if it doesn't cure cancer in

the next five years, we should be disappointed, right?

It's allowed us to unlock the structure of proteins. I mean, it's an incredible -- it's an incredible breakthrough at that level. But what we do

have to be concerned about are the bread and butter issues like employment, those depend on investment and investment, in turn is linked to interest

rates.

So we shouldn't disconnect these options up and get so focused on the inflation target, that all our other priorities, in a sense, disappear from

the table.

NEWTON: Yes, and I really appreciate you linking that back. You know, it was the fall of 2019 that I first heard off the record, one of the leaders

of one of the largest investment banks in the world, saying this is an issue on the table, the issue of, jobs, jobs and how governments actually

mitigate for all the lost jobs coming in AI.

The pandemic interrupted a lot and it will continue to foster debate on these issues.

Adam Tooze, thanks so much, really appreciate it.

TOOZE: Pleasure. Thank you for having me on.

NEWTON: Now, Saudi Arabia and Russia are cutting oil supplies again as they seek to boost the price of crude. Here is how that's gone today. Both Brent

Crude and West Texas Intermediate are down slightly. Oil prices have in fact fallen 40 percent since March last year, when they hit 14-year highs

in the wake of Russia's invasion of Ukraine.

Now demand is being dampened of course by an economic slowdown, particularly in China.

Anna Stewart has more now from London.

(BEGIN VIDEOTAPE)

ANNA STEWART, CNN REPORTER: Saudi Arabia's decision to extend an oil output but isn't surprising, but it is sizable. One million barrels per day

through August and adding in Russia's announcement of a cut half that size for the same month, it takes around 1.5 percent of the world's oil demand

off the market for the month of August.

Saudi Arabia has already made hefty cuts to its oil output in an effort to bolster prices amid concerns of a global economic slowdown.

Now, so far, its efforts haven't really been rewarded. Brent Crude is still trading below the $81.00 a barrel handle, the price point at which Saudi

Arabia can balance its budget according to the IMF.

Russia's announcement comes after the OPEC+ member already agreed to a 500,000 barrel per day cut in March given it then produced more oil than it

said it would that month and again in April, the market may take a more skeptical view on whether Russia will meet its new target.

[15:15:13]

For Russia, various bans, restrictions and G-7 oil price cap have already limited how much it can earn from its oil, and that currently trades around

$20.00 less a barrel than Brent crude.

So perhaps it has less of an incentive to cut output, but doing so could ease tensions between Russia and Saudi Arabia and maintain unity in OPEC+.

Anna Stewart, CNN, London.

(END VIDEOTAPE)

NEWTON: Another big change for Twitter, as owner Elon Musk cuts the number of tweets, yes cuts the number of tweets people can even read each day

without paying extra and some people can't see any tweets at all. Details on QUEST MEANS BUSINESS.

(COMMERCIAL BREAK)

NEWTON: Electric carmaker, Tesla is reporting its best sales quarter yet delivering more than 466,000 cars, but that wasn't enough to put Elon

Musk's company on the top of that market.

Chinese carmaker, BYD sold more than 700,000 hybrid and electric cars between April and June. That's almost double the number BYD sold in the

same quarter last year.

Now Tesla and Twitter boss, Elon Musk is facing a huge backlash after making some big changes to the Twitter platform. The site is applying

temporary read limits -- read limits.

Musk says this is to address high levels of data scraping and system manipulation. Since Saturday, he has kept verified Twitter accounts to

reading 6,000 posts a day.

Now the limit is 600 a day if you have an unverified account. Verification by the way, costs $85.00 a year, and if you don't have a Twitter login at

all, you're currently unable to see any tweets, cannot partake in that platform.

Joining me now, CNN Business writers, Clare Duffy and Peter Valdes-Dapena.

Clare, first to you and please explain this to me because I'm confused by it. Musk says those read limits will soon be going up. What kind of impact

is this having on Twitter and why has he put this in place at all?

CLARE DUFFY, CNN BUSINESS WRITER: So really, I mean, you have today hundreds of thousands of really confused Twitter users. People are

wondering what's going on. I feel like I've seen an uptick in people discussing again alternative platforms to Twitter and now Musk says, this

is a temporary policy change meant to address platform manipulation.

[15:20:08]

But over the weekend, there does appear to have been a genuine glitch on the platform. You had thousands of Twitter users reporting issues accessing

the platform, many people getting this error message saying they had reached this rate limit without actually having read hundreds or thousands

of tweets.

And Musk have tried to play this off. He said this was a chance for people to take a break from Twitter, go outside, but this would be just the latest

glitch that Twitter has faced in the months since he's taken over. And I think stepping back really sort of gets at some of the challenges he's

facing in trying to turn this company around.

NEWTON: Yes, he himself has obviously noted that he might have fired too many people in terms of technical support. But Clare, what is he getting at

here? Is this really to increase revenue?

DUFFY: Well, I mean, it is the question because you know, as you said that he has offered more tweets. You can read more tweets if you bought a

Twitter blue check. But look, I think big picture, this would be a really strange business decision for him if that is really the goal.

I mean, the whole business of this company is to get people to spend as much time as possible on this platform reading as much content as possible,

and selling advertisements based on users' reading content.

And so if you're limiting the amount of content that people can read, that just doesn't really make sense from a business perspective to me.

NEWTON: Yes, such a good point you make there and one that hopefully is not lost on the people that work at Twitter.

Peter to you now in that other company that Elon Musk runs, eye-popping numbers on cars delivered. I mean, really impressive. And yet, given the

recent news we have on Chinese EV, somebody -- some people are wondering, has Elon reached peak Tesla here? Is this really eating into his market?

PETER VALDES-DAPENA, CNN BUSINESS SENIOR WRITER: Well, it's concerning because right now, Tesla is still in the lead on purely electric vehicles.

You know, BYD is in the lead if you include hybrids and plug-in hybrids, but on pure electric vehicles, Tesla for now is in the lead, but that is

not expected to continue.

BYD operates in the largest EV market in the world, by far, in China, and it has got huge sales there. Right now, its sales are still small outside

of China, but it's going to continue to increase and continue to grow in more global markets, and it is expected at some point fairly soon to maybe

pass Tesla in terms of just even pure electric vehicle sales.

Meanwhile, a lot of people are concerned that Tesla's sales increases are coming at the cost of price cuts. Tesla has been cutting the prices on its

most popular models, the Model 3 and the Model Y, and you can't keep that up forever.

At some point to stay ahead, Tesla really does need some new products to get customers interested without having to just keep giving discounts.

NEWTON: And in the short time I have left, Peter, given what Elon Musk has said about the charging scenario here, does it help them, though, now that

Ford and GM and perhaps others now will join in on the Tesla charging network?

VALDES-DAPENA: Yes, it is interesting to see how that plays out and what that does for Tesla. In the short term, it's going to mean more competition

for Tesla chargers, but it certainly does give Tesla more strength in the market that it has built in, the most popular -- what could be ultimately

the most popular charging network standard in the United States.

But is that going to sell cars? We don't know. Because other automakers obviously, hey, GM, Ford, are using that as well. Is that now no longer a

Tesla advantage when everyone's got it? So it's interesting -- it's going to be interesting to see how that plays out.

NEWTON: Yes, it becomes a bit like a utility at that point in time.

Clare and Peter, thank you so much. Really appreciate that.

Now, the US states of Mississippi and Georgia have joined a growing list of those banning TikTok from government-issued devices. Lawmakers around the

world are pushing to block the Chinese-owned app over concerns about data security.

Now TikTok's parent company has launched a new social media app, you see it there, and that's stoking new worries.

CNN's Vanessa Yurkevich spoke with some influencers who are now trying to get an early start on Lemon8.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: People started saying, oh, have you heard about Lemon8? What is this? Like Lemonade? What? I don't know.

VANESSA YURKEVICH, CNN BUSINESS AND POLITICS CORRESPONDENT (voice over): With more than half a million followers on TikTok and Instagram combined --

YURKEVICH (on camera): You guys are known as --

UNIDENTIFIED FEMALE: Sisters snacking.

YURKEVICH (voice over): Even they hadn't heard of Lemon8.

UNIDENTIFIED FEMALE: People were saying it is TikTok's new app, kind of like a mix between Instagram and Pinterest.

YURKEVICH (voice over): They joined Lemon8 in April and have less than 40 followers, but say it isn't about follower count for them just yet.

UNIDENTIFIED FEMALE: When you hear about something like this, especially if it's from TikTok, you want to make sure you're some of the first people

there.

YURKEVICH (voice over): Lemon8 is owned by ByteDance, the same company behind TikTok, that's raising some eyebrows among security experts and

lawmakers.

But TikTok has 150 million users in the US compared to Lemon8 which has only 900,000 active monthly users and say they are creating a community

where people discover and share content related to beauty, fashion, travel, and more in an authentic and diverse environment.

[15:25:11]

LINDSAY GORMAN, SENIOR FELLOW, GERMAN MARSHALL FUND OF THE US: Even when you're talking about a platform like Lemon8, which can start with something

that seems quite benign, there might be less of a national security concern.

But four or five years ago, when we started raising the alarm about TikTok, we encountered the same thing.

YURKEVICH (voice over): Now, bills like the Restrict Act are swirling around Congress to address concerns that foreign countries could access US

user data through social media apps.

SHOU ZI CHEW, CEO, TIKTOK: Two years ago, I became the CEO of TikTok.

YURKEVICH (voice over): TikTok's CEO testified in March, he has seen no evidence the Chinese government has accessed any of that data. Lemon8

declined to answer questions about where data on its app is stored.

SEN. MARK WARNER (D-VA): Good afternoon, everyone.

YURKEVICH (voice over): The bill's co-sponsor, Senator Mark Warner told CNN: "Today, we're talking about TikTok, but as the growth of Lemon8 shows,

new apps and tools are popping up constantly. We need a real strategy to address them. No more Whac-a-Mole."

GORMAN: I think it's definitely possible that ByteDance is seeing some of the writing on the wall with TikTok in the US and is looking for a Plan B.

YURKEVICH (voice over): NK Medani says she was hired and paid by an influencer agency to create content promoting Lemon8.

NK MEDANI, INFLUENCER: I was a little skeptical at first, I didn't know what it was. I had never heard of it.

YURKEVICH (voice over): But now she says, she is having fun exploring what Lemon8 could be, but it is no rival to TikTok yet.

MEDANI: That buzz of Lemon8 came from the almost removal of TikTok. A lot more people are talking about it now, but I think it is solely because of

that mini scare that we all had.

YURKEVICH (voice over): And where consumers are, brands follow.

FIONA CO CHAN, FOUNDER, YOUTHFORIA: I think social media has driven a lot of our organic awareness, so I think it counts for about 85 percent of our

sales.

YURKEVICH (voice over): The beauty brand, Youthforia, found massive success on TikTok, and seeing if it can squeeze some more juice out of Lemon8.

CHAN: I think the fact that it is created by a parent company that's really successful -- that is very, very successful at creating a social media

platform that was really interesting, I'm watching it kind of pick up steam.

It is still to be determined if Lemon8 is going to be that platform for us.

YURKEVICH (voice over): Vanessa Yurkevich, CNN, New York.

(END VIDEOTAPE)

NEWTON: Okay, still ahead for us, Ukraine claims it is gaining ground in its counteroffensive and President Zelenskyy speaks exclusively to CNN.

What he has to say about Vladimir Putin's grip on power. That's next.

(COMMERCIAL BREAK)

[15:30:38]

NEWTON: Ukraine claims its gaining ground and its ongoing counteroffensive over the weekend. New video shows a Russian tank being destroyed near the

city of Bakhmut. You see it there. A top defense official says Ukrainian forces are advancing near that captured city having retaken some 37 square

kilometers in the past week alone.

Meantime, President Zelenskyy sat down for an exclusive interview with Erin Burnett to discuss the aftermath of last week's brief mutiny in Russia.

Listen.

(BEGIN VIDEO CLIP)

ERIN BURNETT, CNN ANCHOR: Mr. President, you know, you recently said that you have dealt and I'll quote you the way it -- the way it quoted, "With

different Putin's it's a completely different set of traits in different periods." Now, of course, he's faced a rebellion and attempted coup from

Yevgeny Prigozhin. Have you seen any changes in how you think he's acting in his behavior since the attempted coup?

VOLODYMR ZELENSKYY, PRESIDENT OF UKRAINE (through translator): Yes, we see the reaction after certain Wagner steps. We see Putin's reaction, it's

weak. Firstly, we see he doesn't control everything. Wagner is moving deep into Russia and taking certain regions shows how easy it is to do. Putin

doesn't control the situation in the regions. He doesn't control the security situation.

All of us understand that his whole army is in Ukraine. Almost entire army is there. That's why it's so easy for the Wagner troops to march through

Russia. Who could have stopped him? We understand that Putin doesn't control the regional policy. And he doesn't control all those people in the

regions. So, all that vertical of power he used to have just got crumbling down.

(END VIDEO CLIP)

NEWTON: Now you can watch Erin's full interview with President Zelenskyy right here on CNN. It airs Wednesday at 7:00 p.m. Eastern time. You'll want

to make sure you catch that interview. Ben Wedeman joins us now though live from Ukraine. You just heard Zelenskyy and look, he never promised shock

and awe with this counteroffensive. He's hitting back against Putin saying he looks weak.

But, again, if we point to this counteroffensive, is Ukraine facing stiffer Russian resistance, then perhaps they expect it?

BEN WEDEMAN, CNN SENIOR INTENATIONAL CORRESPONDENT: I think it's fair to say that that's the case, Paula. What we've seen is that the progress has

been modest. For instance, we heard today from the deputy defense minister that in the east, they gained nine square kilometers and in the south 28.4

square kilometers. That is fairly -- maybe modest is an overstatement. It is very little progress.

But we have to understand the intensity of the resistance that the Russians are putting up and the amount of resources the Russians have put into

preparing for this counteroffensive. For one thing, we've heard from the head of ground forces in eastern Ukraine who visited the front lines around

Bakhmut say that the Russians have dug serious defenses in that area. This evening the spokesman for Ukrainian forces in the East said that the

Russians have deployed 180,000 troops along the Eastern Front.

Keep in mind, that's more than twice the size of the entire British Army. And that in Bakhmut, in and around Bakhmut alone, they have 50,000 troops.

So, the Ukrainians are running into stiff resistance but also having to deal with a Russian army that seems to be throwing everything they have

into countering this offensive. Paula?

NEWTON: Ben, I don't have a lot of time left. But well, what do you make of how Ukraine has been able to implement? Certainly, all the tech where

military where they've been able to get from allied response, from NATO recently.

WEDEMAN: From all -- from what we've seen them using some of this advanced Western weaponry is they seem to have mastered it, but they're dealing with

basic logistical problems. What you hear time and time again from the men who are using Western weaponry is that they have to conserve their

ammunition. And that some of this western weaponry for instance, the M777 artillery piece provided by the United States, they do tended not to be

able to take the wear and tear of the front in terms of the amount of artillery rounds they need to fire at the Russians.

[15:35:09]

So, they -- they're facing problems. And there's the problem for instance, the Ukrainians really don't have advanced - -they don't have control of the

skies. They're waiting for the West to provide F-16s. They still haven't arrived. The Russians have, if not complete air superiority, but they have

the advantage when it comes to the skies above the battlefield. Paula?

NEWTON: Certainly, will be up for discussion as that NATO meeting happens in the coming days here in July. Ben Wedeman for us live from eastern

Ukraine. Appreciate it. Now China is imposing strict export restrictions on some rare materials used in chip production. The announcement comes as U.S.

Secretary of State -- Secretary of Treasury, pardon me, Janet Yellen is set to travel to China in a bid to stabilize ties between Washington and

Beijing.

CNN's Anna Coren has more now.

ANNA COREN, CNN CORRESPONDENT: The U.S. Treasury Secretary will be heading to Beijing later this week to further improve relations between the two

superpowers. It comes two weeks after the successful visit to China by U.S. Secretary of State Antony Blinken to reestablish dialogue.

Janet Yellen is expected to meet with her Chinese counterpart and other high-ranking officials for what we are hearing will be constructive and

frank conversations. But like with Blinken's trip, officials say they are not expecting any significant breakthroughs. She is not expected to meet

with Chinese President Xi Jinping. Yellen has long signaled the Biden administration's desire to improve communications with the Chinese and

lower the temperature between the world's two largest economies, which are deeply entwined.

Back in April while giving testimony before Congress, she's stressed the importance of maintaining ties with China and said that decoupling would be

a big mistake.

And last month at the Paris Finance Summit on stage with Chinese Premier Li Qiang, she said, as the world's two largest economies, we also have a

responsibility to work together on global issues. It is something the world expects of us.

Yellen's trip comes at a time of heightened uncertainty for the global economy. China is struggling to reboot its economy post-COVID following a

slew of poor economic data while the U.S. is trying to contain inflation and avoid recession. Global challenges and mutual areas of concern will no

doubt be on the agenda but the airing of grievances is also a priority. The U.S. has imposed sweeping restrictions on China's access to advanced

technology, specifically semiconductor technology, citing national security threats to the U.S.

While the U.S. is concerned about the scope of China's new counter espionage law, and the challenges it could present for foreign companies.

We know that Yellen will be meeting with American companies operating in China. There certainly will be a lot to discuss during her three-day visit.

But at the end of the day, this $700 billion in trade between the U.S. and China each year, and both countries need each other. Anna Coren, CNN, Hong

Kong.

NEWTON: So, land and sea temperatures have hit record highs in the northern hemisphere. Experts say the target of keeping global warming within 1.5

degrees Celsius is moving out of reach. Cows and other livestock have in fact been major contributors to carbon emissions that heat the planet. But

now some scientists are saying they can be in fact part of the solution to combat climate change. CNN's Bill Weir explains.

(BEGIN VIDEOTAPE)

BILL WEIR, CNN CHIEF CLIMATE CORRESPONDENT (voiceover): In the beginning was the buffalo. Tens of millions of them wandering the land, munching wild

grasses, and using poop and hose to create rich fertile soil up to 15 feet deep.

WEIR: Look at this.

WEIR (voiceover): But since Americans replaced buffalo with cows, generations of fertilizers and pesticides tilling and overgrazing have

turned much of that nutrient rich soil into lifeless dirt. But not on farms, where they graze cows, just like wild buffalo.

PETER BYCK, FILMMAKER/ARIZONA STATE UNIVERSITY PROFESSOR: Also, adaptive multi-paddock grazing, amp grazing is a way that mimics the way bison have

moved across the Great Plains. And so, it's really about the animals hit an area really hard and then they leave it for a long time.

WEIR: Peter Byck is a professor at Arizona State University. And he believes that if enough beef and dairy operations copy this simple hack,

cattle could actually become an ally in the fight against climate change.

BYCK: I anticipate we'll get a lot of pushback. Because people are not thinking that cows can be a part of the solution.

WEIR: Not only are you going against the grain of environmentalists who think meat is evil.

BYCK: Yes.

WEIR: For lots of reasons.

BYCK: Yes.

WEIR: You took money from McDonald's for this.

BYCK: Yes. I asked for money from McDonald's for this. I wanted to go to big companies because if they don't change we don't get there.

[15:40:09]

WEIR (voiceover): For his docu series Roots So Deep, You Can See the Devil Down There, Byck assembled a team of scientists.

UNIDENTIFIED MALE: We're really interested in insects that live in poop.

WEIR: Experts in bugs and birds.

UNIDENTIFIED MALE: Yes, Bobwhite.

WEIR: Cows, soils and carbon. They spent years comparing five sets of neighboring farms in the southeast. On one side, traditional grazers who

let cows roam one big field for months at a time and often cut fertilized grass for hay.

UNIDENTIFIED MALE: Wooh. Come on.

WEIR: On the other side, camp grazers who never mow or fertilize.

UNIDENTIFIED FEMALE: You open the gate, they go through, it takes five minutes (INAUDIBLE) roll up a wire.

WEIR (voiceover): And with a single line of electrical fence, move their cows from one patch of high grass to the next.

UNIDENTIFIED MALE: Not smelling fat.

UNIDENTIFIED MALE: This is how easy it is, Peter.

WEIR (voiceover): While their science is yet to be published and peer reviewed, Byck says early data has found amp farms pulling down up to four

times the carbon while holding 25 percent more microbes, three times the bird life and twice as much rain per hour.

BYCK: If it's 1000-acre farm, it's 54 million gallons of water. That's now washing your soil away versus soaking into your land.

UNIDENTIFIED FEMALE: Wow, look at this grass.

WEIR (voiceover): But this is also a human experiment to see whether data and respectful discussion can change hearts and minds.

UNIDENTIFIED MALE: This was grazed about 40 days ago. And this hadn't been fertilized in 12 years.

UNIDENTIFIED FEMALE: Awesome.

UNIDENTIFIED MALE: And when we got out of spending money on fertilizer was huge, huge.

And I didn't think we'd ever happen.

UNIDENTIFIED FEMALE: It is such a stress relief. We just don't worry about a lot of it anymore.

UNIDENTIFIED FEMALE: And they you don't even fertilize when you plant your rag, right?

UNIDENTIFIED MALE: Nothing. It sounds crazy but just letting mother nature do the work.

UNIDENTIFIED MALE: Would it be an interesting thing if you didn't have to pay for fertilizer?

UNIDENTIFIED MALE: Would that be wonderful?

WEIR (voiceover): Curtis Spangler is one of the conventional farmers in Roots So Deep. And he says his mind was changed when he realized he now has

a way to double his herd and quit his second off-farm job.

CURTIS SPANGLER, FARMER: And right now, we're having to dump thousands of dollars into nitrogen every year that really if we just change a couple

things, we might be able to save that money to put it toward other resources.

WEIR: Is that something you're committed to doing now as a result of this project? Yes.

SPANGLER: We're really looking and seeing the benefits of it and how we can work it.

WEIR (voiceover): So, as we hit the height of grilling season, a little food for thought.

WEIR: There is ways to produce meat that is not good for the planet and there's ways to produce meat that's really good for the planet. And that's

the nuance that's been missing.

Bill Weir, CNN, Jasper, Tennessee.

(END VIDEOTAPE)

NEWTON: And that is QUEST MEANS BUSINESS. I'm Paula Newton. Up next, Connecting Africa.

(COMMERCIAL BREAK)

END