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NEWS STREAM

U.S. Drone Strike Kills Khorasan Group Leader in Syria; A Look Inside Hamas' Tunnel System; Apple's Stock Takes Hit Despite Strong Sales; Hackers Find Exploit in Chrysler Wi-Fi; Young Boy Killed as Zetas Cartel, Mexican Security Forces Clash. Aired 8:00a-9:00A ET

Aired July 22, 2015 - 8:00   ET

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


[08:00:12] KRISTIE LU STOUT, HOST: I'm Kristie Lu Stout in Hong Kong. And welcome to News Stream.

Now the U.S. says a targeted strike killed a top terrorist in Syria, the leader of the Khorasan Group.

Strong sales in China help Apple to make well over a $10 billion profit, but they won't say how many Apple Watches were sold.

And we go inside the tunnels that Israel says Hamas militants use to see how Israel plans to build what it calls an underground Iron Dome.

The Pentagon says a targeted strike has taken out the leader of the Khorasan Group, that's an al Qaeda offshoot that includes some of its most

dangerous veteran operatives. And among them, and at the helm of the organization, was veteran terrorist Muhsin al Fadlhi. Now the U.S.

military says that he was killed in Syria earlier this month.

Now, Pentagon correspondent Barbara Starr joins me now live from the Pentagon with more on this story. And Barbara, this terror leader was

very, very high on the U.S. hit list.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Someone indeed, Kristie, that the U.S. wanted to get. The Pentagon saying it was July 8, a vehicle

traveling in northern Syria near Aleppo, there was a U.S. drone keeping an eye on it. They determined that al Fadlhi was in the vehicle and fired

against him.

Why did they want to get Muhsin al Fadlhi? That Khorasan Group, that's an offshoot of al Qaeda that has vowed to attack the United States,

vowed to attack the west, and has the bombmaking capability by all accounts to do it.

He was such a veteran operative. He's one of the few al Qaeda members that it is said he was informed about the 9/11 attacks before they took

place, and then in 2002 was involved in another series of terror attacks that involved U.S. marines in Kuwait and a French cargo vessel.

So all of this adding up to someone the U.S. wanted to take off the battlefield. Very interesting, though, they were -- that he was in

northern Syria. The U.S. may not have troops on the ground, but it has eyes and ears and the intelligence. When they found him, they took the

shot -- Kristie.

LU STOUT: Very curious about that. This was a targeted drone strike taking place inside Syria. So how did the U.S. get the intel for this

strike?

STARR: Well, the drones can fly overhead for a long period of time if they have an initial sense of where someone is, maybe from intelligence on

the ground, maybe from intercepts of cell phone or media, they can send up a drone and track somebody.

To be clear, we don't have the details about this, but it might be something that's very interesting to ISIS, officials say, to really

understand that the U.S. can track them even when they don't have troops on the ground.

LU STOUT: Barbara Starr reporting live for us. Thank you.

Now, as mentioned earlier, the Khorasan Group is a collection of senior al Qaeda members being moved into Syria as the country was fast

ascending into civil war. The U.S. President Barack Obama says it is a group of seasoned al Qaeda operatives. Its stated mission is to find new

ways to attack the United States and Europe.

Now other anti-U.S. terror groups, namely ISIS and the al Nusra Front focus on creating much of their violence in the Middle East.

The Khorasan Group is thought to direct most of its energy plotting external attacks in the west. But all three terror organizations, they

have one thing in common, they all spawned from al Qaeda.

Now the UK says it is cracking down on terrorism inside its borders. On Tuesday, two British men were charged with terror related offenses. And

prosecutors say that they were planning to travel to Syria to join ISIS and that one of them planned to attack U.S. military personnel in the UK.

Neither has been asked to enter a plea at this point.

Now for more on this story, let's go straight to CNN's Fred Pleitgen. He joins us live from London. And Fred, the two men, we saw the court's

sketch just now. They appeared in court earlier today. What can you tell us?

FRED PLEITGEN, CNN INTERNATIONAL CORRESPONDENT: Well, they appeared in court and the charges were read out against them, Kristie. And as you

said, they were charged with wanting or plotting to travel to Syria. And one of the two men, 24-year-old Junaid Khan (ph) was also charged with a

second terrorism charge, which pertained to him allegedly having plotted to kill American service members here in Britain.

Now, he is a delivery driver here -- or was a delivery driver until he was arrested. And it was said that plotted to kill these American service

members in what they called a car accident style attack.

Now it's not clear whether he wanted to stage a car accident to get a service member to stop on the road, or whether or not he planned to run

over a U.S. service member, similar of course to what happened in 2013 with a British soldier Lee Rigby who was killed here in the London area.

It was, however, also alleged the he wanted to use a knife. And at some point, there were also plans to maybe use a suicide vest as well, some

sort of explosive device.

Now, the actual trial is going to start on August 10. And so far both men will not be out on bail before that trial starts, Kristie.

LU STOUT: All right, trial to begin on August 10.

And these arrests, they follow David Cameron's speech that he gave on Monday, detailing his counterterror strategy in the years ahead. The UK

certainly stepping up its action against extremism. So as such, should we expected to see more terror arrests ahead?

[08:05:48] PLEIGTEN: Well, it's interesting, one of the things that the police anti-terror terror squad said here is that this was part of an

ongoing anti-terror operation. So it seems as though there certainly is still similar work that is still going on as well.

Whether or not there will be more arrests is something that we'll have to wait an see. But you're absolutely right, it does appear as though

Britain is stepping up its counter terrorism efforts. One of the reasons, of course, possibly being the Tunisia attacks, which of course claimed many

British lives.

So David Cameron did a couple of days ago outline a strategy that not only of course contains more counterterrorism efforts, but also contains

ways to try and combat non-violent extremism as well. The counter indoctrination, trying to prevent people from even wanting to go to places

like Syria to join groups like ISIS, that certainly is something that plays a major role as well in this larger scheme.

And then also we have to keep in mind that Britain also now is very much thinking about and has started to bomb targets in Syria as well, anti-

ISIS targets there.

So, these are certainly things where we can see that Britain very much is ramping up its effort not only to combat ISIS, but generally a violent

and non-violent extremism as well, Kristie.

LU STOUT: All right, Fred Pleitgen, reporting for us live from London. Thank you, Fred.

Now we turn now to the U.S. state of Texas where police, they face pointed questions about how a woman died in jail and how she was arrested.

Now she was pulled over for failing to use her turn signal. Now the patrolman's dash camera recorded it all, but as CNN's Ed Lavandera reports,

the video has some holes in it.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Step out of the car.

LAVANDERA: Newly released dash-cam video of 28-year-old Sandra Bland's arrest is raising new questions about what really took place just three

days before she was found dead in this Texas jail cell. For starters, the 52 minute video of the traffic stop and her arrest appears to have several

discrepancies.

UNIDENTIFIED MALE: Get out of the car.

UNIDENTIFIED FEMALE: Don't touch me.

LAVANDERA: Watch as the white vehicle driving on the left sudden suddenly vanishes from the road, and this brief moment when a tow truck

driver walks away from the view then quickly reappears at the truck's door. Immediately following the scene repeats. All the while the audio is playing

uninterrupted. It's not clear whether the video was edited or if an equipment video was to blame. All of this casting doubt the video reflects

a continuous account of the heated encounter with Texas state trooper Brian Encinia.

UNIDENTIFIED MALE: I'm going to drag you out of here.

UNIDENTIFIED FEMALE: You're going to drag me out of my own car?

UNIDENTIFIED MALE: Get out of the car! I will light you up. Get out now! Get out of the car!

UNIDENTIFIED FEMALE: Really, for a failure to signal?

UNIDENTIFIED MALE: Get over there.

LAVANDERA: A bystander captured images of the trooper holding Bland to the ground, but dash-cam video caught what she's saying.

UNIDENTIFIED FEMALE: You're a real man now. You done slammed me and knocked me head in the ground.

LAVANDERA: Good, good.

UNIDENTIFIED FEMALE: You should have thought about that before you start resisting.

LAVANDERA: Authorities say bland later committed suicide in her cell. This is a look inside where she spent her final hours. The Texas department

of public safety says Trooper Encinia failed to comply with the department standards for professionalism. He has been pulled off parole duty as state

officials investigate. Police say they are looking into Bland's death as a murder.

(END VIDEOTAPE)

LU STOUT: Ed Lavandera reporting there.

Now one other point about the jail where Bland was found dead, police say that there were four other female inmates in there with her, and that

all of them told authorities that no one did anything to harm her.

Now the Chinese artist Ai Weiwei may finally be able to attend his exhibits abroad. Now the famous dissident said that he finally got his

passport back today. And for the past four years, Chinese authorities banned him from leaving the country.

Now this photo was taken in 2010 during one of his oversees trips. He set up a giant installation in London's Tate Modern Gallery with 100

million sunflower seeds all made of porcelain.

Now Ai Weiwei is known for his work that challenges political authority.

Now this is from his latest exhibition in San Francisco Alcatraz Prison. It took place last year. And he used Lego bricks to form the

faces of Chinese dissidents like Liu Xiaobo as well as the American whistleblower Edward Snowden and Chelsea Manning.

Now Apple's numbers, they appear pretty solid, but they're getting a poor reception by the markets. Up next, a rundown of how the company fared

in the last quarter and why its stock took a beating.

Also, Uber digs in for a big fight in the city that never sleeps. We'll show you what New York is doing that has the ride service so

concerned.

(COMMERCIAL BREAK)

[08:12:04] LU STOUT: Welcome back.

Now Apple has released his third-quarter earnings, recording almost $11 billion in profits. Now even though the company sold 47.5 million

iPhones, it was fewer than what some analysts had predicted, and that caused the stock to slump.

But Apple sales did well. they sold nearly 11 million iPads and almost 5 million Macs.

Now there is one notable product that Apple is refusing to release numbers for, their newest product: the Apple Watch. It remains a mystery.

It was listed with other niche items like Apple TV and the iPod. Now Apple says demand for the Smart Watch has soared since June. One big driver

continued to appear. Now sales in China were up 112 percent by far, Apple's biggest growth.

Now the New York City Council is taking aim at Uber. It is to decide this week whether to limit the number of cars that for hire services can

add to their fleet.

Now Uber has blasted the vote as a political move by the mayor. Laurie Segall has more.

(BEGIN VIDEOTAPE)

LAURIE SEGALL, CNN INTERNATIONAL CORRESPONDENT: The one scrappy startup, turned multibillion dollar business, is going to battle once

again. Thursday, New York City's mayor will propose legislation that could halt Uber's expansion, proposing a cap. Big car limo companies could grow

their fleets just 1 percent through next April.

For Uber, that means only 200 new cars. Here's why.

UNIDENTIFIED MALE: There are a host of issues.

UNIDENITIFIED MALE: Traffic congestion. We talked about our drivers being treated fairly, our consumers getting (inaudible).

Let's take a breath. Let's just talk about capping for a short period of time the growth of new vehicles on our already congested and flooded

streets. To have that conversation.

SEGALL: Uber dismissed the reasoning, citing politics.

And pointed to jobs in jeopardy.

DAVID PLOUFFE, POLITICAL STRATEGIST: They want to cap our growth I think really as an offering to the taxi industry who has showered them with

a lot of campaign money.

With a stroke of a pen, the mayor of New York City would be eliminating over 10,000 jobs. It's unbelievable.

SEGALL: Uber is launching its own political campaign, led by a man with a track record, President Obama's former campaign manager David

Plouffe.

The company is releasing sponsored ads slamming the mayor.

ANNOUNCER: Tell Mayor de Blasio, don't strand New York.

SEGALL: Hosting rallies.

UNIDENTIFIED MALE: We have to support Uber, because it's about our families.

SEGALL: And taking its campaign global.

Uber is now in more than 300 cities, many in which they're facing protests from local taxi drivers, millions of dollars in fines and lots of

regulatory questions.

How is what's happening here in New York, how does it relate to what's happening all around the world when it comes to Uber taking a lot of

cities, taking a lot of states by storm.

UNIDENTIIFIED MALE: Well, I think that certainly we've seen a lot of places around the world grapple with the Uber question. How do

municipalities and the states deal with a -- again a $50 billion giant corporation coming in to write its own rules or have no rules at all.

SEGALL: Uber says that in New York, the mayor is focused on the wrong rules.

PLOUFFE: It's a cap on jobs. If you care about income opportunity. Unfortunately, I think this is less about the economy or congestion than

it is about politics.

SEGALL: And speaking of politics, regulating companies like Uber came up on the campaign trail.

HILLARY CLINTON, FRM. U.S. SECRETARY OF STATE: This on demand, or so- called gig economy, is creating exciting opportunities, but it's also raising hard questions about workplace protections and what a good job will

look like in the future.

SEGALL: Whether or not Uber wins on Thursday, their campaign is just getting started.

Laurie Segall, CNN Money, New York.

(END VIDEOTAPE)

LU STOUT: Two hackers have demonstrated a way to remotely take over a car. And their research shows a flaw in several Chrysler models that allow

a hacker to remotely control the car over the internet.

Now the problem is in the Uconnect wireless service that connects the cars to a cellphone network.

Now hackers can cut the brakes, shut down the engine, drive it off the road or make all the electronics go haywire.

Now a writer for Wired magazine experienced the hack firsthand.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I can't turn it down. Now the air conditioning is blasting, the music is blasting, and I can't see anything because of the

(EXPLETIVE DELETED) windshield wiper fluid.

(END VIDEO CLIP)

LU STOUT: Now vulnerable cars include late 2013 to 2015 Jeep Cherokees, Chrysler 200s, Dodge Rams and other vehicles equipped with

Uconnect.

Now Chrysler has acknowledged the problem and is offering customers a software upgrade.

Now a Lufthansa passenger jet carrying more than 100 passengers had a close call with a drone, and it apparently made the pilots very angry.

Now the jet was preparing to land at Warsaw's Copin Airport on Monday when the pilots noticed a black object on the right side of the plane. The

pilots navigated around it and the jet thankfully it landed safely.

Now the private use of drones falls into uncharted legal territory, and privacy issues aren't the only problem. Our Rene Marsh reports on a

recent incident in Connecticut that is raising serious safety concerns about how drones are used.

(BEGIN VIDEOTAPE)

RENE MARSH, CNN CORRESPONDENT: This is the video that caught federal investigators' attention. Police say 18-year-old Austin Halwit (ph) of

Clinton, Connecticut is the mastermind behind this homemade gun-mounted drone.

The video posted to YouTube gained more than 1.7 million views. One person writing, quote, "strange and a scary thought for someone to be using

a drone to carry a firing gun."

Police say Halwit (ph) opened fire on his private property, and that's not illegal if done safely. Police have no evidence anyone's life was in

danger.

The FAA is now investigating whether he violated the agency's rules.

PETER SACHS, LAWYER: There are countless ways that drones can be useful. Using one as a remote-controlled weapon is not one of them.

MARSH: This comes after a man crashed a drone on the White House lawn earlier this year. In the end, prosecutors did not pursue charges.

From his online postings, the Connecticut teen appears to be a drone enthusiast. He has post additional videos, including this one.

UNIDENITIFIED FEMALE: Yeah, you want to take picture?

MARSH: He says a woman assaulted him after he flew drone above her. The woman allegedly believes he was recording her at a Connecticut beach.

UNIDENTIFIED MALE: She took a swing at me. And I began falling to the ground.

MARSH: The woman was charged. He was not.

But when it comes to this video, no indication yet whether there's any law to be enforced.

UNIDENTIFIED MALE: Laws, they take awhile. Well, technology doesn't wait. It moves forward.

MARSH: Well, because drone laws have not caught up with technology, it's sometimes tough to regulate the surge of drones taking to the skies.

Now although it appears there's nothing police can do on a state and local level, the FAA is still investigating. There is no federal law that

explicitly prohibits arming a drone, but the FAA does have regulations that say you cannot drop an object from an aircraft. And a drone is considered

an aircraft. So at the very least this could be a violation of FAA operating rules.

Rene Marsh, CNN, Washington.

(END VIDEOTAPE)

LU STOUT: Wow, a startling video there.

You're watching News Stream. And still to come on the program, a horrific practice, it affects millions of women and girls around the world.

A shocking new study on female genital mutilation.

(COMMERCIAL BREAK)

[08:23:36] LU STOUT: Coming to you live from Hong Kong, you're back watching News Stream.

Now it is barbaric, but some call it a traditional practice. But what is clear is that the victims of female genital mutilation can be found in

countries around the world. And a shocking new report found that in one bureau in London, almost one in 20 women is a victim.

Now a warning, this report from Atika Shubert is disturbing.

(BEGIN VIDEOTAPE)

ATIKA SHUBERT, CNN INTERNATIONAL CORERSPONDENT: Summer sun shines on some of London's cutting edge architecture just south of the Thames river

in Southwark Borough. But newly released data shows a dark side to this part of London. FGM, also known as female genital mutilation, has made its

way here, with the migrants who've been affected.

The numbers are shocking: According to Equality Now, one in twenty women in Southwark are estimated to have undergone FGM, the highest

prevalence of FGM in Britain.

The data comes from an estimate of the number of women from FGM prevalent countries now living in the UK.

It's said to be practiced in 29 countries, mostly in Africa. Unicef estimates that over 125 million women and girls have had these types of

procedures, worldwide.

Isatou and Renata are two survivors of FGM, originally from Gambia, now in London. They spoke to us last year.

ISATOU KRAMAR, FGM VICTIM: The worst part of it was when you have to.go and squat, they made a little hole on the ground and you have to go

and squat in it, so that the blood can come out. I find that really disgusting because there is other kids next to you as well, crying.

When you go out there, you just think that's normal you know, and then you just find out that's really wrong. No child should ever have to go

through that.

SHUBERT: Since September of 2014, Britain's National Health Service is now required to register all cases of FGM it finds. So far, nearly 4,000

cases have been newly identified, an average of 500 a month.

This year, in an unprecedented case, the UK issued a protection order to prevent two young girls from being taken out of the country, for fear

they were destined for a circumcision ceremony abroad.

Something Isatou and Renata vow will never happen to their daughters.

RENATA BERAUD, FGM VICTIM: I was like there's no way that anyone's doing that to my daughter, and if they do I'll make sure they go to prison

for it. And at first she was like, oh, you guys, you've taken up the culture here so much. You're African. This is our culture. We founded it

here, we have to continue it. And I was like no mom, not with me.

The data on FGM survivors is still being collected, but these numbers are one way campaigners say to shine a light on an issue that's been kept

in the dark for far too long.

Atika Shubert, CNN, London.

(END VIDEOTAPE)

LU STOUT: An important story there by Atika Shubert.

Now they are a sophisticated, they are hard to detect and central to many of Israel's anxieties about Hamas. Now we'll show you how the Israeli

military is stepping up its effort to find underground tunnels used for smuggling weapons.

Plus, gunfire in Mexico that would leave a young boy dead and other civilians wounded. We'll bring you the view from locals who are outraged

at the military for being there in the first place.

(END VIDEOTAPE)

LU STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching News Stream. And these are your world headlines.

An official in Turkey tells CNN a 20-year-old Turkish national has been identified as the suicide bomber in Monday's gruesome attack near the

border with Syria. At least 32 people were killed when the blast ripped through a rally in Suruc.

A suicide bomber has set off an explosion in a busy market in Afghanistan. Police say at least nine people have been killed and at least

31 were wounded. They say it happened in the central bazaar of Almar district near the Afghan border with Turkmenistan.

Chinese artist and activist Ai Weiwei has his passport back. He made the announcement on Instagram. In 2011, China detained him for nearly

three months and kept his passport until today. Now Ai is known for his artwork that challenges political authority.

Israel is using new technology to prevent militant attacks. Now it's a system built specifically to detect tunnels built by Hamas. Oren

Liebermann brings us the view from underground.

(BEGIN VIDEOTAPE)

[08:30:42] OREN LIEBERMANN, CNN CORRESPONDENT (voice-over): This could be a video from last summer's Gaza War, Hamas militants in an underground

tunnel, but it's not. Israel's intelligence officials say Hamas is building new tunnels and finding them has become a top priority ever since the Gaza

War.

Along the border with Gaza, Israel is testing a new tunnel detection system, working with the United States. Major Nir Peled says it is a

dangerous game of underground hide-and-seek.

MAJOR NIR PELED, IDF: Every time we find that there's a new tunnel that our previous method didn't manage to actually find, we test ourselves

and analyze that case and find a new method to find the next one.

LIEBERMANN (voice-over): During the war, Hamas militants launched surprise attacks from tunnels that crossed under Israel's security fence

and into Israel. The military says it destroyed more than 30 tunnels, some more than a mile long and 60 feet deep. The IDF says there were nearly 60

miles of tunnels along the Gaza border.

CAPTAIN DANIEL ELBO, IDF: The ceiling is made out of concrete --

LIEBERMANN (voice-over): Captain Daniel Elbo took us into one of the first tunnels the military found before the Gaza War. Israeli intelligence

knew Hamas was building tunnels but still had trouble pinpointing them. When soldiers stepped inside the tunnels, they were stunned by the

construction.

There's a lot of room here, once you get used to this claustrophobic feel, to move quickly here. Somebody could run easily through this tunnel,

carrying weapons. There's even enough room here for a motorcycle and it's well built enough to ground the surfaces flat enough that you can move

quite quickly.

ELBO: The next tunnels will be at least as good as this one. And then we know that Hamas did not stop their digging process.

LIEBERMANN (voice-over): Tunnel experts say tunnels are not just a tool of the past; they are a battleground of the future.

COL. ATAL SHELACH (PH), TUNNEL EXPERT: It's going to be our problem for at least five decades from now. One of the main tools to a struggle and

to be, let's say, kind of a fair fight, it's to get -- it's to go underground.

LIEBERMANN (voice-over): Israel won't say much about the new tunnel detection system but the IDF says they're constantly working on improving

the system. Before the Gaza War, the IDF developed Iron Dome to protect against rocket attacks. Now they're testing the Iron Dome of the

underground to protect against tunnels.

Oren Liebermann, CNN, Southern Israel.

(END VIDEOTAPE)

LU STOUT: In just hours from now, Greek lawmakers will decide whether to back reforms needed to secure a eurozone bailout. The latest bill

focuses on new rules for dealing with failing banks as well as ways to speed up court proceedings to save costs.

Now the first set of reforms were passed last week during a rebellion within the ruling party. Even the former finance minister voted against

it. For months, Greece rejected them, hoping to strike a better deal with Europe and angry critics have slammed the Greek prime minister for failing

to live up to his election promise to end austerity.

If the reforms go through, eurozone leaders will kick off talks on a third bailout. Athens then has until August 20 to work out the details and

secure rescue funds, otherwise it won't be able to meet debt payments to the European Central Bank and could be kicked out of the eurozone.

But if it all goes well, lawmakers in Greece and its eurozone creditors will likely vote on the deal in September.

Now, Mexico's war against drug cartels is well documented, but less well known is how vigilante groups keep watch over some Mexican communities

to guard against drug related violence.

Now Mexico's military recently confronted one such group and as CNN's Polo Sandoval shows us the consequences were tragic.

(BEGIN VIDEOTAPE)

POLO SANDOVAL, CNN CORRESPONDENT (voice-over): In Ixtapilla, Michoacan, cameras captured a violent clash between the Mexican military

and a group of civilians Sunday.

State officials say this violence was triggered when police arrested Semei Zepeda for possessing illegal firearms. Zepeda is the head of the

local autodefensas, a government-sanctioned group of civilians taking up arms against drug cartels, fighting for control of the region.

Gunfire erupts, civilians and soldiers scramble for cover and the chaos ends, four civilians are injured and a 12-year-old boy shot dead.

This clash is leading to questions and conflicting reports from both sides. Zepeda's group went online in defense, saying the military did not serve a

warrant for his arrest.

General Felipe Gurrola maintains his men fired only into the air and after being aggravated by the crowd with gunfire.

[08:35:16] GENERAL FELIPE GURROLA , MEXICAN ARMY (through translator): These people cowardly used the vulnerable as shields for their illegal

actions.

SANDOVAL (voice-over): A legislator representing that region is firing back, defending her constituents against the military's accusation.

UNIDENTIFIED FEMALE (through translator): That's foolish. They ask themselves what the children were doing there. They live there. They were

unarmed and they're used to being among the military all the time.

SANDOVAL (voice-over): Gunshots have become the norm in Michoacan's mountainous region since 2013. That's when the vigilante groups, made up

mostly of farmers, rose up and armed themselves. Their objective: protect their towns amid a bloody cartel turf war. These days local defenders say

the soldiers, instead of standing beside them, are fighting with them.

The Mexican government promising to launch a full investigation into who fired those shots first. It's a move that's likely to provide little

comfort for the family of a little boy caught in an increasing violent conflict.

Polo Sandoval, CNN, Mexico City.

(END VIDEOTAPE)

LU STOUT: You're watching News Stream. And still ahead, Taylor Swift is launching a clothing line in China, but we'll tell you why one item in

particular may be a problem for the Chinese government.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now being rich in China isn't as easy as it once was. The stock market crash has wiped billions off the balance sheets of the nation's top

tycoons, and then there's the anti-graft campaign which continues to ensnare former party leaders.

Now for the estimated 360 billionaires in China today, these are tough times.

And for the latest on China, I spoke to a panel of guests on how the anti-corruption drive is affecting the nation's ultra rich.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They are scared. I mean, when I talk with billionaires, they're definitely nervous. I think this anti-corruption

crackdown is definitely real. It's going through all levels of the country. It's having a much greater impact on the economy than people

realize, because government officials, for instance, don't want to approve a new initiative because they're worried about getting arrested.

The billionaires right now are going very low profile, and they're not investing in new projects. They're spending a lot of time right now

overseas on vacations.

This crackdown is very serious and I think it's a way by Xi Jinping to sort of relegitimize the party, make a much more even economic playing

field where low income, middle class Chinese feel that they can get rich, too, without being well connected.

It's definitely changing the culture of business in China today.

UNIDENTIFIED MALE: Actually on that point, we actually saw billionaires are still investing in the real economy. So we surveyed about

3,000 of them and a majority of them still have faith and confidence in the current government and also their economic policy. And they're still

reinvesting in their current business as well as adding investment to the high growth industries like technology, Valtech (ph), internet consumption

related.

But they're not really moving overseas or stop investing in the real economy.

UNIDENTIFIED MALE: Moving overseas meaning investing overseas. So, I was speaking with some real estate billionaires lately, and they said that

their returns are not going to be as good in China because there's too much scrutiny on the corruption side so they're looking at investing in Cambodia

or in Thailand, into large infrastructure type projects and also to benefit from the one belt, one road new program.

(END VIDEO CLIP)

LU STOUT: and you can watch the rest of this episode of On China tomorrow. It's airing Thursday 4:30 p.m. in Hong Kong, 5:30 p.m. in Tokyo.

You can also read more on our web site. Just go to CNN.com/China.

And finally Taylor Swift is taking on China. The American pop star is teaming up with a Chinese online retailer JD.com to launch her own clothing

line. Now Swift is said to visit Shanghai in November for her 1989 tour. 1989 is the name of her latest best selling album as well as the year she

was born.

But some in China couldn't help but notice the significance of that date and her initials TS.

Now 1989 was the year of the Tienanmen Square crackdown when hundreds of students were killed in pro-democracy protests.

And so far, though, it seems she has managed to shake off the Chinese censors.

And that is News Stream. I'm Kristie Lu Stout. But don't go anywhere, Christina Macfarlane is up next and she'll be speaking with

reigning Open golf champion Zach Johnson on World Sport. It's coming up next.

END