ISIS Leader Al-Baghdadi Appears in Video After 5 Years; U.S., China to Resume Talks in Bid to End Trade War.
CHATTERLEY: Hello, I'm Julia Chatterley. There is more QUEST MEANS BUSINESS in just a moment, when the chairman of Emirates says he may take his business to Airbus. And One Belt One Road, lots of controversy. China rolls out a new phase of its ambitious trade plan. Before that, the headlines this hour. Sri Lanka's President tell CNN the Easter bombers had quote "very clear links with ISIS." He says they were trained by the terror group. The President blames negligence for the Intel Community not acting on warnings ahead of the attacks. Mourners will gather next hour to bury a woman who gave up her life protecting her Rabbi during a shooting at their synagogue in California. Lori Kaye is being remembered as a hero for shielding the Rabbi from gunfire. Police say a 19-year-old gunman opened fire during services Saturday. He is scheduled to appear in court on Wednesday. Spain's ruling Socialist Party is celebrating a victory at the polls even though it fell short of winning and outright majority. Incumbent Prime Minister Pedro Sanchez says he will form a pro-European government, but it's still unclear which parties he may recruit to build a coalition. ISIS has released a video purported to be of its leader, Abu Bakr Al- Baghdadi. If authentic, it would be the first time he has been seen since July of 2014 despite previous reports he was killed or is seriously injured. In the video, Baghdadi praises the attacks in Sri Lanka and calls for vengeance for the fall of the last town held by ISIS in Syria. Barbara Starr is following this story from the Pentagon for us. Barbara, two important things here, first actually, just seeing him on film as we mentioned there for the first time in five years. But, one, acknowledging the defeat of the caliphate, but, two of course, pivotal timing in light of the attacks in Sri Lanka on Easter Sunday. What do we make of this?</s>BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Julia, U.S. military and intelligence officials, and I suspect intelligence services around the world are scouring every frame of this video now to see what clues they can discern. The time references that Baghdadi made of course are most interesting since the Sri Lanka attacks were just days ago, which suggests he has a very current knowledge of world events, of ISIS events believed that ISIS inspired those Sri Lanka attacks. And he has the capability to move communications on a fairly rapid basis. Raised the request should -- about how -- you know, just how deep in the hiding he may be. What officials are concerned about, obviously, is this all raises the specter that this is indeed the new ISIS that they had feared. It may no longer have its physical caliphate, it may not control a territory, but it can marshal and inspire fighters, train, organize, finance and equip them. Sri Lanka, I think it's fair to say it was a real eye opener in terms of those so-called inspired ISIS attacks. The capability that those fighters demonstrated on a large scale in that country, the havoc that they unleashed is really an eye opener for the U.S. as it begins to calculate the ISIS that it faces now. Julia?</s>CHATTERLEY: Absolutely, potent propaganda. Barbara Starr, thank you so much for that update there. All right, returning now to our top story tonight, Boeing CEO Dennis Muilenburg promises to re-earn trust, has he faced questions from investors at the company's annual shareholder meeting in Chicago. After two plane crashes, Boeing is struggling to limit the damage from an unprecedented safety crisis. These airlines have all either pulled their business or saying they're reviewing their orders for more 737 Max planes. As we've noted many times, it's simply not that easy to cancel an airplane order. The Emirates chairman says he's considering taking his business to Airbus. Sheikh Ahmed bin Saeed Al Maktoum spoke to John Defterios at the Arabian Travel Market in Dubai.</s>SHEIKH AHMED BIN SAEED AL MAKTOUM, CHAIRMAN & CHIEF EXECUTIVE OFFICER, EMIRATES: I think Fly Dubai had a big hit I would say. Grounding 14 aircraft, the total, 76 aircraft. You know, safety, it is always an important issue, what has happened shouldn't really be repeated. And what is the future of this aircraft and will it be flying again?</s>JOHN DEFTERIOS, CNN EMERGING MARKETS EDITOR: Are you convinced about it, that's the number one question as chairman about the 737 Max 8. Are you convinced?</s>MAKTOUM: It's a good aircraft when we talk about aircraft, but that also gives me the option that I have also to look, because still, I mean, still have a big number of aircraft coming to Fly Dubai. So that give me the option to talk also to Airbus about aircraft.</s>DEFTERIOS: Oh, you may not be overly dependent on the new 737s, is what you're saying?</s>MAKTOUM: That's right, yes. You look at also at the Airbus aircraft --</s>DEFTERIOS: You have full view results coming out on May 9th. The first six months of your fiscal year, you had a drop of 86 percent. Currency exposure, higher oil prices, what can we expect on May 9th? Your first loss in the history of Emirates.</s>MAKTOUM: No, it will not be a loss, it will be a profitable year for Emirates --</s>DEFTERIOS: You say that with confidence.</s>MAKTOUM: Yes, for sure.</s>DEFTERIOS: Fifty to $60 oil you prefer, we're in this range now of 60 to 70-plus, despite the interventions by Donald Trump. What is your preference? Should the region not be fighting for a higher oil prices because it puts the squeeze on the rest of commerce in the region?</s>MAKTOUM: I wish I really can call that shot. It's not me. I want it as a business when we talk about the airline business. We want it anything between $60 and below.</s>DEFTERIOS: And that the Emirates fleet, you cut back on the A380s, is the future because of the competition mid-sized, long haul, 787s, A350s?</s>MAKTOUM: You know, when we look, we're a very big supporter of the A380s from day one. But also, what we see today is the twin jet aircraft which is coming. There are many aircraft that really carry today 400 passenger aircraft. We talk about, for example, the 777X which is coming to the -- to the market.</s>DEFTERIOS: You've done this collaboration with Emirates and Fly Dubai, does it make industrial logic to do the same with Etihad, your neighbor in Abu Dhabi. And will you be in a merger by the time you leave as chairman of Emirates, so we can get a timeline here?</s>MAKTOUM: There is nothing called merge. We've been cooperating -- there's a relationship between the airlines, but nothing called merger.</s>DEFTERIOS: And you won't be going to a merger, is what you're saying to me today, you're not going to a merger?</s>MAKTOUM: I don't know what will happen after five years or ten years. But as we speak today, I know by next year, there's no such merger. Because if you look at the two models, we are exactly the two similar models. You know, and there are two big airlines we're really to put them together. So it's better really to let them solo together.</s>CHATTERLEY: John Defterios there speaking to the Emirates CEO in Dubai. Now, in just hours, talks between the world's two biggest economies will begin yet again with hopes the sides could be closer to ending their trade standoff. Discussions between the United States and China are due to start in Beijing. The White House says they will cover issues including intellectual property, forced technology transfers, non-tariff barriers and agricultural trade too. The U.S. is not the only trading partner China is focusing on. However, Beijing has just wrapped up a major forum on its global infrastructure plans, the Belt and Road Initiative. President Xi Jinping has been keen to hail it as a success.</s>XI JINPING, PRESIDENT, CHINA (through translator): More than $64 billion worth of deals were signed during the summit this week. All these achievements have fully shown the cooperation achieved through the Belt and Road Initiative has followed the current trend and has gained the people's support and improved the people's livelihood and has a special place in this world.</s>CHATTERLEY: As you can see, China is swiftly turning its ambitions into reality both on land and at sea. More than 5,000 participants attended the recent Belt and Road forum, including Italy of course, the first G7 nation to sign on. Daniel Russel was an Assistant Secretary of State for East Asian Affairs under Barack Obama, and he's now vice president at the Asia Society and he joins us now. Great to have you with us.</s>DANIEL RUSSEL, VICE PRESIDENT, INTERNATIONAL SECURITY & DIPLOMACY, ASIA SOCIETY: Happy to be here.</s>CHATTERLEY: Let's call this a rebranding exercise because President Xi was talking about things like taking a zero tolerance of corruption, focusing I think on some greater due diligence because let's be fair, they've had some sheer intense criticism as a result of these projects around the world.</s>RUSSEL: Yes, that's right. Well, look, Xi Jinping has been saying the right things in the Belt and Road forum. The question is whether China is doing the right things. In the fields, in these various belt and road projects. So far, the world has begun to react to the problems with bribery, the problems with environmental pollution, the lack of sustainability in terms of the financing. There's been a lot of blowback. The good news is that the Chinese clearly have heard that. The question mark is whether there would be more than just sweet-sounding rhetoric and promises. The world, frankly, has promise fatigue when it comes to China. Now it is important that Xi Jinping is acknowledging that there had been these problems. And in committing China to a clean BRI, to an open, an internationalize BRI, to a green BRI. He is sending a political message through the Chinese system, saying this is what I expect. But unless that's followed up with real mechanisms, including enforcement mechanisms to make sure that at a minimum, the standards that China insists on at home for dams or for power plants are honored in the developing world, that's really the test.</s>CHATTERLEY: I mean, the test comes when you want international investment, particularly from the --</s>RUSSEL: Right --</s>CHATTERLEY: Developed world because the due diligence there will be enforced by others if not China themselves. But with the operations that they have in the developing world, particularly some of the criticisms that they've come under in countries in Africa, for example, the idea that they're just colonizing there and extracting resources. Is it just going to be proof in the pudding to see ultimately whether they do follow through on some of the good promises here?</s>RUSSEL: Well, I'd say there are two big problems. One is, as you point out, our international investors are never going to put their money in a Chinese belt and road project unless it has been fully de-risked. Unless there's been the adequate due diligence needed. And developing countries and governments have difficulty, they lack some of the capacity in order to insist that those standards are met. And secondly, you know, there's a lot of mystery and not a lot of facts available about belt and road and belt and road projects. There's no database of projects. There's not even a clear definition of what is or isn't a belt and road project. And it's -- there's also a tremendous amount of difficulty for international companies to compete because the tenders thus far haven't been open.</s>CHATTERLEY: What about trade here? Because the suggestion as well was that this was an opportunity and President Xi took it to say to the Americans here, look, we're ready to step forth, we're ready to have a mutual enforcement process on the trade deal, we're willing to tackle intellectual property theft, technology transfers. How confident are you on this one that when China says it's ready to engage here and follow through, it actually is?</s>RUSSEL: Well, it's a clear signal that President Xi Jinping and the Chinese leadership definitely want to put an end to the pain from tariffs. They definitely want to reduce the risk of instability and pressure from the tariffs imposed in the trade approach taken by the United States government. But it's a start, but it's a long way from declaring on interest in a fair and balanced reciprocal trade agreement to actually getting one, particularly given China's long record. Now, the Trump administration has been struggling to find ways to build in enforceability --</s>CHATTERLEY: Right --</s>RUSSEL: In the agreement. They've been taking quite a tough line with the Chinese. Xi Jinping now has a long time horizon. And whether his plan at least in part, to out-wait the Trump administration, to again make commitments, but use non-tariff barriers to restrict the access for international firms, now, that's really the unknown in the challenge.</s>CHATTERLEY: Yes, it's a good point. Even six years isn't a long time when you don't risk elections back at home to be voted out --</s>RUSSEL: Right --</s>CHATTERLEY: In President Xi's case. A healthy dose of skepticism I hear there, Daniel. Thank so much for that. Daniel Russel there. All right, after the break, you know, the White House says stellar U.S. growth in Q1 was no fluke, some economists say the picture isn't as rosy as it appears. I'll ask the former chief economist of the IMF what he makes of it all. That's coming right up, stay with QUEST MEANS BUSINESS.