An American in China; A Quiet Invasion | 60 Minutes Full Episodes

Entering China is almost impossible for most Western journalists. This is the financial and economic capital of China, but when the US ambassador, Nicholas Burns, invited us to visit and interview, we were granted visas. Is our relationship the most competitive in the world? Right now, this is the most important, most competitive, most dangerous relationship that the United States has in the world right now, and I will think for the next decade about what will happen if Vladimir Putin enters another country besides Ukraine by force. He is already 15 years old. He has Russia invade neighboring Georgia, he has military stationed there and controls 20% of the country.

Whats Next? The Russians are buying apartments here every 33

minutes

and registering a deal every 26

minutes

, so we are on the verge of a very dangerous situation. situation here in Georgia I'm Leslie Stall I'm Bill Whitaker I'm Anderson Cooper I'm Sharon alone I'm John Wory I'm Cecilia Vega I'm Scott Pell those stories tonight on 60 Minutes American CEOs used to faint In China, its vast consumer group has been a magnetic attraction for decades, but doing business there has become so complicated and risky with intellectual property theft and an expanded espionage law used to intimidate the business community that American companies have hit the pause button. that the relationship between the United States and China has become contentious due in part to China's belligerent activity towards Taiwan and in the South China Sea last year's spy balloon incident and the list continues to make things worse the Chinese economy has hit a wall export growth is slowing the country's growth Drowning in debt and youth unemployment has skyrocketed.

Getting to China to tell that story is nearly impossible for most Western journalists, but as we first reported in February, when US Ambassador Nicholas Burns invited us to visit and do an interview, we were granted visas. with him at his residence in Beijing. More money leaves China for the first time in 40 years and then comes from American, Japanese, European, Korean investors. Now, why is that and how problematic is it? For them, it is a real problem. For this economy, they have 1.4 billion people here, they have to continue growing and foreign capital is important. You ask why I think there has been a contradiction in the messages from the government here in China to the rest of the world, on the one hand.

They say we're open for business, we want American CH Japanese companies here, but on the other hand they've called out six or seven American companies since the last raid in March, they've gone into American companies, shut them down, and made accusations. We believe they are very unjustified American companies include Banan Company and Mince Group A company that performs due diligence for other companies that might want to invest here was raided last year Five of their Chinese employees were detained and are still there Another company C Vision was raided The message was not loud and clear, a report about it was put on state television, it accused Western consulting companies of espionage and theft of military and national security secrets, they want the investment to return and they are raiding American companies and there they approved an amendment. to its anti-espionage law and is written in such a general way that it could be that American businessmen could be accused of espionage for engaging in practices that are perfectly legal and acceptable elsewhere in the world to collect data to carry out the due diligence so you can decide whether you want to invest in a company or form a joint venture, right?

What do you think the Chinese are afraid of these companies finding out? What do these due diligence companies care about you? I know, I think they want to control data on Chinese people, on Chinese companies, etc., that I think is at the heart of the problem with American companies that operate in that sphere. Ambassador Burns told us that's just one of the concerns he hears there. There is still theft of intellectual property from American companies here. Are all American companies afraid of that? Yes, all kinds of American companies began flocking to China in the early 1980s after the country opened up to the West under then-leader D sha ping and now American banks operate here.

Walmart has almost 300 stores throughout the country. Shoppers here in Shanghai can buy Levis, browse an Apple store, and get a caramel frappuccino. Starbucks has 6,000 stores in China, a thousand stores in Shanghai and they want to continue building because coffee was a tea culture for hundreds. For years now, at least among young Chinese, it's becoming a coffee culture and they love Starbucks, they love Starbucks and I'll buy them a cappuccino. I'll take one, thanks. Boeing is here and Tesla Fizer Chevron Intel, but while some companies are thriving. Many foreign companies are concerned about the business climate under President Xi Jinping.

If we follow China from the death of Ma to the opening of China to the world, we have seen a kind of closure, we have seen a centralization of party power we have seen greater repression of the people of China here, which is a very significant trend. in the last decade with Shei under his leadership. Part of that trend includes President Xi reversing many of the market reforms that unleashed China's economic miracle. growing in 40 years the fastest growth rate recorded in economic history 8 9 10 Growth rates of 11% have lifted 800 million people out of poverty, but what is happening is that the growth rate is slowing, most economists now project that it will be 2 three 4% growth maybe even lower in the next support for their society if it is so low that will be difficult for them if there was so much explosive growth if so many people came out of poverty why What is moving away from what worked well?

I think maybe they have conflicting priorities. The government here in China certainly wants the economy to grow, but they also have a national security mentality. They want to control the data. They want the right to control to be more important than economic growth. It seems that way. I think it's open to debate are you listening we're listening to both messages it sounds like you yourself don't know the direction it's going what I sense here is that the biggest energy is with those on the National Security side of the Chinese government good morning. How are you on a train trip from Beijing to Shanghai?

The ambassador noted that in the decades before the 11th president, China boosted its economy by investing in these high-speed trains, roads, factories and skyscrapers that illuminate Shanghai, China's financial capital, but under the presidency. XI China lost more than $120 billion in long-term foreign investment last year due to a weakening economy and harsh government tactics that have left American companies uncertain about the future. There are many American companies here. Many of them simply. Picked up and left because of this current business environment, you know, that's interesting, not many, not many, not many, why not, China is the second largest economy in the world, it's a big market, so some American companies are gone, but most have stayed, some American companies are. moving at least some of their operations to Singapore, Vietnam, Mexico, but they are not going to leave China, the irresistible market for American businessmen, it is gigantic, maybe they are not leaving, but they are not investing, they are not making important investments until that they can. see exactly where the government is headed because of the 1.4 billion potential consumers, some companies like Disney are increasing their investment.

Welcome to Shanghai Disney Resort. They recently expanded their Shanghai Disneyland which we're told is thriving after a $9 billion company based in Crystal Lake. Illinois is another American company that bucks the trend of capital flight. Aptar Asia's president, Shangu Gang, a Chinese-born American citizen, showed us one of his five manufacturing sites in China. We are manufacturing for some of the biggest brands in the US, in fact, consumer brands in the US. The factory makes packaging and dispensing devices for food, pharmaceutical and beauty products sold in Asia. All our clients, like PNG, L'Oreal, are all here doing business in China for almost 30 years.

Recently, they invested $60 million in a new factory. He says that even in a slowing economy the company is doing well, American companies here, as the ambassador well knows, are pausing or cutting their investments, but this company is not expanding well, because we are here for the long term and we believe in energy consumption. Of the growing middle class there are 1.4 billion people here and imagine, for example, healthcare and the same with cosmetics and beauty and beverages, all those sectors. Packaged foods are really the biggest market, so we're very confident in that. In the long term, what does it really say about trust in the US-China relationship?

It seems to say that you believe things will get better. What I'm asking is a great question for the Ambassador, I think so. I hope he knows. I see, Burn actually says he is wary of the future, as the fundamental rivalry and mistrust between the United States and China is shaking the confidence of the business world and has brought our relationship to its lowest point in half a century. Is our relationship the most competitive in the world right now, this is the most important, most competitive, most dangerous relationship that the United States has in the world right now and I think over the next decade I want to quote you again and tell us what you wanted say.

I have said that divorce is not an option, our two countries have to live together and I think this is the biggest tension in the relationship between the United States and China. China is our most important competitor and at the same time, China is our third trading partner. 750,000 American jobs at stake. agriculture China is the biggest market for us agriculture 1 of all our agriculture export products are sent to China, which was 40.9 billion last year, so we can't afford to have a real break here Well, there are compc jobs, something would be complicated. People say we are so competitive with China that we should end the economic relationship.

The consequence of that would be that 750,000 American families would not be able to put dinner on the table, which is an extraordinarily difficult balancing act in my opinion. job, you're a good brother, I've never seen myself that way, but the tightrope, well, we have competing interests here and balancing those interests is the reality in the US-China relationship, we're going to compete, We have to compete responsibly and maintain peace between our countries, but we also have to commit more to the Law of Balance and the biggest economic problem in China today, when we go back, one in five people in the world is Chinese, China's population is four times larger than that of the US and the rest of the world.

The country is vast, 3.7 million square miles, overlooking the Taiwan Strait, where half of the world's trade flows each day, and is located about 100 miles from Taiwan. President XI likes to say that the East is rising, the West is declining, but economically the United States is prospering in comparison. to China in December Moody's, the credit rating agency, lowered its outlook for China to negative and faces a long-term demographic problem: a decline in the birth rate that experts say is irreversible, meaning The country is aging and shrinking. Ambassador Nicholas Burns advised us of a tour that begins in Beijing, the ambassador and his wife Libby like to take early morning walks in a park near his residence.

This is a 600-year-old Ming Dynasty park called Ron Park. It is a place for many retirees and many young people and is tremendously active where the locals come for their morning routines such as Tai Chi yo-yoing and pingpong. Oops, you couldn't tell from these scenes that China, where the co-pandemic began, is still emerging from the trauma of President XI Jinping's oppressive zeroo policy. 68, a career diplomat serving in Republican and Democratic administrations, arrived in China at the height of the zero covid lockdowns and quarantines when my wife Libby and I arrived here in early March 2022, we were quarantined in this house for 21 days for 3 weeks Shanghai, a city of 26 million people, was completely closed for 63 days.

What was that like in the city? We had women who needed to give birth and we had to find a way to get them to the hospital. We hadAmericans who wanted to give birth. but they had to find a way to get out of their closed compounds to the airport, so zero Co worked for a while in 20 and 21 they had very low or relatively lower infection rates, but by 2022 it had really divided this society and sparked rare widespread protests. Then, in December 2022, President XI abruptly ended the policy, the last thing this government is going to accept here is volatility.

Volatility is something that Yorg Woodka, a German businessman who has lived and worked in China for more than 30 years, has not seen since the Tianan Square uprising. in 1989 you represent BASF, the largest producer of chemicals in the world, you said that this is a country with post-traumatic stress disorder, a country with post-traumatic stress disorder, what do you mean? Well, everyone has been traumatized by the lockdowns that took place in many cities in China and the kind of messages. that came from the leadership it's for their own safety and then the blockade was lifted it was actually more of a capitulation of the government the blockade basically left and like we were wrong we are going to lift it they never said they were wrong that's not the system to admit they did something wrong and then it's basically like a tsunami is sweeping across the country after they lifted it.

December January I would say a billion people were infected and certainly many people died. Independent analysts say an estimated 1.4 million people died. This kind of environment really changes your attitude towards life and in business we thought we were going to have a comeback story and we had a good couple of weeks and then the economy has basically fled since you know, after covid. In the West, in the United States, in particular, we had a huge and rapid rebound. Why didn't it happen well here? I think Co has also covered up a couple of long-term problems that China has been accumulating, for example in the real estate sector. sector we reported on real estate 10 years ago with amazing sites like this of empty buildings in city after city across the country, this is today similar hollowed out vacant lots of unoccupied and unfinished apartments known as ghost towns when I was here 10 years ago I never expected to see these buildings still here, but back then a real estate bubble grew and eventually burst.

This housing crisis is at the heart of China's economic decline. Has anyone counted the number of empty units, I mean, across the country? In Germany we have 82 million people who could move here immediately 80 80 to 90 million apartments are empty 80 to 90 million apartments are empty I'm done with the years Chinese banks easily lend money to developers as the housing boom Construction created millions of jobs and fueled China's growth, but in 2020 President XI's government clamped down on rampant borrowing, causing major developers to default on their loans and run out of money. Look, the facade isn't even finished, they say they couldn't. even afford to dismantle the cranes in January never Grand once China's largest developer was ordered to liquidate its remaining assets left in the lurch there are millions of Chinese citizens who bought these apartments before they were built developers now These are customers who paid uh to the magnitude of 1 billion of us, so if I put a down payment on one of these apartments, will I ever see that money?

No, you won't see the money. It's over, it's over, it's over, so I mean, it was really dramatic 10 years ago. We were told this was the way people deposited money into their savings and retirement fund; That is still the case, 66% 23 of the average family household wealth is in apartments and the loss of wealth has depressed consumer spending and dragged down the economy we wonder if people blame President XI for that or the covid deaths but it was impossible for us to gauge public opinion or if it even matters while no one from the government would give us an interview that we were able to learn about how yorg Woodka, who has lived here for 30 years, told us that it is not a good idea bet against the Chinese people.

What are some of the positive aspects of the economy? They have a strong U-shaped manufacturing base here, but most of it is really between the ears of people, the brains of the Chinese entrepreneurs who really made this success story a reality. China is not really good at basic research, but it is fantastic at development. They are world champions in making products better, faster and cheaper. They are better? Yes, some areas. our Chinese competitors are breathing down our necks and basically driving some of us out of the market, for example China now manufactures over 80% of all solar panels in the world, dominates the wind turbine market and last year became the world's largest exporter of automobiles and In addition, they are the main trading partner of twice as many countries in the world as the United States, so they have a leading trade partner in aid with more than 60 countries in the world and now, with heavy government subsidies, they are is quickly becoming a leader in electric vehicles.

The carmaker byd competes with Tesla for the title of the world's best-selling electric vehicle manufacturer. Shanghai-based Neo is trying to break through with high-tech innovations in December, the company introduced a new battery with a range of 6.20M more than 200M further than Tesla's top model, this is our flagship William Lee, the CEO and founder of Neo, says its battery swapping technology allows owners to swap out their dead battery for a

full

y charged one in less than 3 minutes exactly, that's a two and a half minute Two and a half minutes Two and a half minutes Yes, we have already installed 2,200 exchange stations in China.

China is also developing a humanoid robot industry. Look, after many years it is becoming a reality. Alex Goo is the founder and CEO of Forier Intelligence Hello. last year they released the gr1, their first generation humanoid, we can make an arm, you can move the arm, yes you see, oh look at the fingers, oh my god can you play the piano, yes the future he can definitely do it in the future, also in the future, he says, robots. We could provide healthcare to China's rapidly aging population. Maybe we can, for example, remotely control that type of robot to help my grandfather, for example.

Yes. I believe that President Shei, who visited this company last year, has called for mass production of humanoids by 2025. In his annual New Year's speech he spoke about the country's economic problems and for the first time recognized the high rate of unemployment. Still, he has set a long-term goal of doubling China's economy by 2035 and surpassing the West in technology. Our companies and technology experts are competing in artificial intelligence, biotechnology and quantum mathematics, all those technological advances will lead to a new generation of military technology. Our two armies are competing for military supremacy, who will be the most powerful in the most important strategic part of the world, which is the Indo Pacific.

She and Presidents Biden met in San Francisco in November in hopes of restoring military communications between our two countries that China had cut off. I think we have returned to a more established and stable relationship between the two countries, but it has been a roller coaster. The point he said was the spy balloon incident last year, but there has also been the build-up of military bases in the South China Sea, the increase in air raids near Taiwan and the drone of US military planes. . Is there a drop in temperature in South China? They don't see, and that's an unseen problem, and then in Taiwan, after Speaker Pelosi's visit, we've seen for 16 months a much higher rate of Chinese air and naval activity, which is very intimidating and It's meant to be intimate, and isn't it?

They haven't backed down on that and I think ultimately they want to become and overtake the United States as the dominant country globally and we don't want that to happen, we don't want to live in a global world where the Chinese are the dominant country. When the Cold War ended we all thought our system had won yes, you know, his system failed our system stood up now he came back and said no, no, the communist system is the right way. I guess we didn't bury him after all. I know it's interesting to compare the old Cold War to this era.

What distinguishes this era from the old Cold War. The Soviet Union had strong military and nuclear weapons. It had a very weak economy that in no way competed with ours. China's economy is very strong. We are dealing with an adversary, a competitor in China stronger than the Soviet Union in the 1940s, '50s, '60s, '7s and '80s, so if that was a Cold War, what do you call this? It's a competition of ideas, a battle of ideas, our idea, America's great idea. of a democratic society and human freedom versus China's idea that a communist state is stronger than a democracy, we don't believe that, so there is a battle here about what ideas should lead the world and we believe that those are American ideas, the The latest salvos in the battle for supremacy came last month when China held two days of large-scale war games in Taiwan and President Biden imposed strict new tariffs, including a 100% tax on Chinese electric vehicles. .

It was different from the other times I was there reporting on 60 Minutes overtime.com sponsored by ntek ODT some of the retail news from the day Russia invaded one of its neighbors, fought a bloody war and seized a fifth of the territory of that neighbor, fear and shock spread Throughout the region we are not talking about the Russian

invasion

of Ukraine, but about the small country of Georgia, that

invasion

was more than 15 years ago. Vladimir Putin's playbook hasn't changed much today. Georgia, which shares a 556-mile border with Russia, is still trying to remove Kremlin control days after Russia invaded Ukraine Georgia applied to join the European Union in hopes of getting a Western insurance policy for protect her last October we met with the president of Georgia Salam zor bash raised the daughter of Georgian refugees in Paris says Vladimir Putin has launched an invasion of Georgia in an attempt to expand Russia's reach.

The war in Ukraine is now entering its third year. How is the war there impacting life here? Of course, it is a reminder of everything this country has been through and the fact that it is always a danger and an immediate threat, it is already part of the reality that Russia is testing the waters, you think the Russians are testing the waters right now in Georgia, right now, what's it like here? their way their easy way uh it's hybrid war a hybrid war that has included televised and online disinformation campaigns and anti-Western propaganda introduced in Georgia a favorite tactic of the Kremlin Georgians have seen it before in 2008, three weeks before Russia launched Its first air attack on Georgia Moscow hit the country with a series of cyber attacks, the bloody five-day battle that followed ended with Russia seizing 20% ​​of Georgia's lands.

President Zor Bash says the mostly silent international reaction to that war laid the groundwork for Russia's invasion of Ukraine. and Vladimir Putin's plan to bring the former Soviet republics back into the Russian fold today one fifth of Georgia is occupied by the Russian army and an estimated 8,000 Russian troops are inside the Georgian border we travel with the forces of Georgian security 37 miles outside the capital of Toi towards the small town of Caletti Today it is a rural no man's land, oh my goodness, on the other side of a rickety bridge we found an abandoned stretch of farmland choked by barbed wire, a warning sign to stay outside, there she is and a defiant 87-year-old Valia Benes.

V the Russians told me that this is our land and I said no, our land is in Russia. This is our land, it is not yours, you have no rights here. How long have you been surrounded by barbed wire for 15 years? In 2008, her land was confiscated by Russian troops. The grandmother of four still refuses to give up her house, trapped by her family on which she depends. Outsiders and a stick to deliver her the food and medicine she needs. She whispered to us that the Russians were on us. Watching from that hill are you afraid of the Russians, yes, I'm afraid of them.

What if they catch me and arrest me? Nobody can help me. I'm alone when it's just a couple of them. I can always respond to them and defend myself, but when there are many of them, there is nothing. what we can do Georgia borders Russia to the north, Azerbaijan to the east, and Armenia and Turkey to the south. The bridge between the Black Sea and the Caspian Sea is a routeimportant for natural gas and oil high in the Georgia mountains. We saw another reason why the small country of almost 4 million inhabitants is crucial for the Kremlin.

A long line of Tri, many of them carrying European cargo across the border into Russia. United Nations data shows that since the war began, everything from cars to chemicals has entered Russia through Georgia, some in violation of laws. Western sanctions are a lifeline for the Putin regime. There is also traffic coming into Georgia. Thousands of Russian citizens enter the country by car and on foot, stretching for miles and arriving in waves first at the start of the Ukraine war in 2022 and again later that year as it is fought. The elderly men fled Russia's draft, but some Georgians fear that Putin loyalists may be entering the country as well, laying the groundwork for Russia's next move.

When Vladimir Putin invaded Ukraine in 2022, he said it was, among other things, to protect the Russians living there, President Zor's fears. Putin could launch a similar campaign in Georgia since the war. Georgia has become home to 100,000 Russians. It is very disconcerting when in your own country you have people who speak the language of the enemy and who think they are at home, the Russians. They think they are at home, they are behaving and they think they are very much at home, so there is a very fine line and that line must be maintained so that we do not have incidents in the future that would allow Russia to use its favorite doctrine of protecting Russian-speaking citizens, so why doesn't Georgia just say no more Russians across our border?

A question for the authorities, are you not the authority? No, I do not have the executive powers and unfortunately the executive power to control the Georgia border. was directly in the hands of its Iraqi Prime Minister, Gabish. He publicly said he supported the country's attempt to move away from neighboring Russia and join the European Union, but his actions and inactions told a different story since the invasion of Ukraine. Prime Minister Gab Bashi agreed to resume flights between Tii and Moscow for the first time in almost 5 years. He has also not adopted strong sanctions against Russia. The Prime Minister's critics accuse him of being in the pocket of a Georgian oligarch, including a billionaire who helped get him elected president.

A 67-year-old oligarch made his fortune in Russia and served a brief period as George's prime minister. His $50 million home looms over Bisi, a reminder of his wealth and power in 2022. European lawmakers called for sanctions against the oligarch over his dating links to the Kremlin - a connection that could undermine Georgia's EU bid. we are going with a government that is completely corrupt a government that is pro-Russian clearly anti-Western umClearly it doesn't care about what the majority of the population wants and needs. Anad and Daim Madad are members of the shame movement, a group with thousands of young followers working to achieve Georgia's entry into the European Union.

If Russia wins, it means loss of freedom. everything we've fought for in the last 30 years is basically a fight for values, it's a fight for where you want to be in this great fight for democracy as soon as the West in any form, whether it's the partnership with the US. , or the European Union, no. represented in this country Russia will fill the void immediately they say that the influx of Russians is already changing the face of Georgia what are they doing if we look at it they are buying apartments they are buying private properties they are opening businesses um, their actions changed, uh, Georgian economy, the Russians are buying apartments here every 33 minutes, they are buying land every 27 minutes and they are registering a business every 26 minutes, so I think we are on the verge of a very dangerous situation here in Georgia according to public records The Russians have registered more than 20,000 companies in Georgia in the last 2 years and have opened five new Russian-only schools, none of which are licensed by the Georgia Department of Education.

The Russians have raised rental prices by almost 130%. Because everything from food to cars has increased by 7%, more than 100,000 Georgians have left the country because many of them can no longer afford to live here. I have heard this described as a silent invasion. Silent invasion, yes, there is a risk of an economic crisis. Divergence, there is a risk of military intervention and there is a risk that the state of Georgia will be destroyed. Emanuel LNF George smeno and pel bakov don't look like much of a threat. All Russians in their twenties fled their country for fear of being drafted or imprisoned.

Speaking out against Putin, they now live in Georgia and work at this Russian-owned comedy club in Toi. I TR said that I am against the war in Russia. I was beaten and after that I went to prison. Three times, so three times you went to jail, uh, yeah, three times, I think and I know that the Russians are actually against the war. You think most Russians are against the war, yes, just scared, really scared. Have any of you had any aggression towards you because you are Russian? I actually have a big writing on the wall it's the biggest thing I see from my window just big Russians go home no subtlety in the spray paint anti-Russian graffiti covers the city along with support for Ukraine on the walls downed Georgian flag joins those of the European Union, US and NATO More than 80% of the Georgian public supports EU entry, as does Georgian President Zor Bash, but his position has become increasingly increasingly ceremonial as the country moves toward parliamentary government after she went to Europe to try to pave the way. for Georgia Zu's candidacy, Prime Minister Aroi Gabashvili accused her of violating the Constitution, banned her from traveling to Europe, and tried, unsuccess

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y, to remove her president.

Zor Bash has defiantly continued to fly to Europe to meet leaders at his expense, it does not seem as if the prime minister is interested in joining the EU. Well, that is a question that the entire population asks themselves if they really want it or if it is a service. This is a critical moment. Do you think that the West, particularly the United States, has been receptive enough and supportive enough of Georgia at this point, I don't think so, and I would take a concrete example, I've been president for five years, and I haven't managed to have any kind of meeting at my level, whether it's the president or the vice president, even through a phone call, I understand that there are more pressing issues, but I think there needs to be more public recognition, recognition of the fact that the United States is supporting our candidate status within the European Union.

I know that is the language the United States has with our European partners, but repeating it at the highest level would be meaningful to the Georgian population. The EU has established a list of requirements for Georgia to become a full member. conditions include fighting corruption and diminishing the economic and political influence of national oligarchs. Membership is not guaranteed. What will happen to Georgia if the EU rejects the offer? It would be a great victory for Russia. Some victory popsicles refuse to give them. 87 years old, she says. stands firm for herself and for Georgia, that candidacy may be in greater danger last February, the Georgian Parliament appointed a new prime minister, an anti-Western member of the main Russian party Georgian Dream, in May its government passed a foreign agents law who threatens to silence the media and the NOS within Georgia and just last week his party proposed legislation that would strip same-sex couples of their rights.

Both measures, according to the EU, could seriously jeopardize the country's chances of membership and drag Georgia deeper into Russia's orbit. m Scott Pell we will be back next week with another edition of 60 minutes