The Current Status of Economic Competition Between the U.S. and China | A  Report – Video

The Current Status of Economic Competition Between the U.S. and China | A Report – Video

The relationship between the U.S. and China has always been complex, but recent economic and political tensions have heightened the competition between the two countries. American businesses, once eager to tap into China’s vast consumer market, are now facing increased risks of intellectual property theft and intimidation tactics. As the U.S. and China engage in contentious activities in regions like Taiwan and the South China Sea, the economic landscape is also shifting. China’s slowing export growth and rising debt levels have raised concerns among foreign investors.

Despite these challenges, some American companies, like Shanghai Disneyland and Aptar, have found success in China by tapping into its rising middle class consumer base. However, the overall uncertainty in the business environment has caused many American companies to pause or scale back their investments in China. The U.S. ambassador to China highlights the delicate balancing act required in maintaining a strong economic relationship while addressing security concerns.

As China aims to double its economy by 2035 and surpass the West in technology, the U.S. is grappling with the implications of China’s growing influence. The competition between the two countries goes beyond economic rivalry to a battle of ideas, with America’s democratic values pitted against China’s communist ideology. The future of the U.S.-China relationship remains uncertain, as both countries navigate the complexities of a changing global landscape.

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Video Transcript

American CEOs used to Swoon over China its vast pool of consumers has been a magnetic draw for decades but doing business there has become so fraught and risky with intellectual property theft and an expanded Espionage law used to intimidate the business community that us companies have pressed the pause

Button on top of that the US China relationship has become contentious due partly to beijing’s belligerent activity toward Taiwan and in the South China Sea the balloon spy incident of last year and the list goes on making matters worse the Chinese economy has hit a wall export growth is slowing the country’s

Drowning in debt and youth unemployment has soared getting into China to tell that story is All But but impossible for most western journalists but when the US ambassador Nicholas Burns invited us to come for a visit and an interview we were granted visas we spoke with him at his residence in

Beijing the story will continue in a moment more money is leaving China for the first time in 40 years then is coming in from American Japanese European Korean investors now why is that and how much of a problem is that for them that’s a real problem for this

Economy they have 1.4 billion people here they’ve got to keep it growing and foreign capital is important you ask why I think there’s been a contradiction in the messaging 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 businesses here but on the other hand they’ve rated six or seven American businesses since last March raid rated they’ve gone into American companies and shut them down and made accusations We Believe are very much unwarranted the American companies include banan company

And the mince group a company that does due diligence for other companies that might want to invest here was raid last year five of its Chinese employees were taken into and they’re still there another firm cap Vision was raid L the message wasn’t loud and clear a report about it was put

On statun television it accused Western consulting firms of Espionage and stealing National Security and Military Secrets they want the investment to come back and they’re raiding American companies and their they’ve passed an amendment to their counter Espionage law and it’s written in such a general way that it could be

That American Business people could be accused of Espionage for engaging in practices that are perfectly legal and acceptable everywhere else in the world collecting data to do deal diligence so that 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 that these companies are going to find out these due diligence companies what are they work you know I think they want to control data about the Chinese people about Chinese companies and so U that I think is at the heart of the problem with those American companies operating in that

Sphere Ambassador Burns told us that’s just one of the concerns he hears about there is still intellectual property theft from American companies here is every American company afraid of that yes all kinds of us companies began flocking to China in the early 198 80s after the country opened to the West

Under then leader dong sha ping and now US banks operate here Walmart has more than 300 stores across the country Shoppers here in Shanghai can buy Levis browse in an Apple store and get a caramel frappuccino Starbucks has 6,000 stores in China a th000 stores in Shanghai and they want to keep building

Because coffee this was a tea culture for hundreds of years it’s now becoming at least with the young Chinese a coffee culture and and they love Starbucks they love Starbucks and I’ll buy you a cappuccino I’ll take one thank you Boeing’s here so is Tesla fizer Chevron Intel but while some businesses are

Thriving many of the foreign companies are worried about the business climate under President Xi Jinping if you track China from the death of ma to the opening of China to the world we’ve seen a closing of sorts we’ve seen a centralization of power of the party we’ve seen increased repression of the

People of China here that’s a very significant Trend just over the last decade with she under his leadership part of that Trend includes president she’s reversing many of the market reforms that unleash China’s economic Miracle they’ve been growing over 40 years the fastest growth rate in recorded economic history 8 n 10 11%

Growth rates they’ve lifted 800 million people out of poverty but what’s happening is that growth rate is slowing down most economists are now projecting they’ll be at 2 three 4% growth maybe even lower in the next they support their society if it’s that low that’s going to be difficult for them if there

Was so much explosive growth if so many people were lifted out of poverty why is he turning away from what worked well I think they’ve got maybe competing priorities the government here in China certainly wants the economy to grow but they also have a national security mindset they want to control data they

Want that’s more important the control right than economic growth it seems that way I think it’s open for debate you’re hearing we are hearing both men messages it sounds as if you yourself don’t know the direction it’s going what I perceive here is that the greater energy is with

Those on the National Security side of the government of China good morning how are you on a train trip from Beijing to Shanghai the Ambassador pointed out that in the decades before President XI China powered its economy by investing in these high-speed trains roads factories and skyscrapers that light up

Shanghai the financial capital of China but under President XI China lost more than $120 billion worth of long-term foreign investments last year because of the weakening economy and the harsh government tactics which have left American companies uncertain of the future there there are a lot of American

Companies here have a lot of them just picked up and let 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 a few American companies have left

But most have stayed some American companies are moving at least some of their operations to Singapore Vietnam Mexico but they’re not leaving China the market irresistible to American Business bus people it’s gigantic maybe they’re not leaving but they’re not investing they’re not making major Investments until they can see exactly where the

Government is headed yet because of the 1.4 billion potential consumers some companies like Disney are increasing their investment welcome to Shanghai Disney Resort it recently expanded its Shanghai Disneyland that they told us is thriving and aptar A9 billion company headquartered in Crystal Lake Illinois is another American firm bucking the

Trend of capital flight president of aptar Asia shangu gang a chinese-born US citizen showed us around one of their five manufacturing sites in China we are manufacturing for some of the largest US Brands actually the US consumer Brands this factory makes the packaging and dispensing devices for food pharmaceutical and beauty products sold

In Asia all our customers like PNG laa esela they’re all here doing business abtar in China for nearly 30 years recently invested $60 million in a new Factory shangu gang says even in a slowing economy the company is doing well American companies here as the Ambassador well knows are pausing or

Cutting back on investment but not this firm you’re expanding well um because we are here for the long term and we believe in the consumption Power Of The Rising middle class it’s 1.4 billion people here and um imagine for for example health care and the same with um

Cosmetics and beauty and um beverage all all those sectors packaged Foods these are really the biggest market and so so we are very confident about uh the long term what does it say about the confidence really in the US China relationship it it seems to say you

Believe that that things will what I’m asking get better that’s a great question for the Ambassador I believe so I hope so you know we’ll see actually burn says he’s wary of the future as the fundamental rivalry and mistrust between the US in China is shaking the confidence of the

Business world and has pushed our relationship to its lowest point in half a century is it our most competitive relationship in the world right now this is the most important most competitive and most dangerous relationship that the United States has in the world right now

And will I think for the next decade or so I want to quote you back to you and tell us what you meant you have said divorce is not an option right our two countries have to live together and this I think is the greatest tension in the US China

Relationship China’s our most significant competitor and at the same time China is our third largest trade partner 750,000 American jobs at stake agriculture China’s the largest market for us agriculture oneth of all of our export a products from agriculture are sent to China that was $4.9 billion last

Year so we can’t afford really to have a real break here well it’s complicated jobs would it’s complicated some people are saying well we’re so competitive with China we should end the economic relationship well the consequence of that would be 750,000 American families wouldn’t be able to put dinner on the

Table and so this makes for an extraordinarily difficult Balancing Act in my job you’re a Linda brother I’ve never thought of myself that way but you’re up high wire right 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 keep the peace between our countries but we also have to engage more about The Balancing Act and the biggest economic problem in China today when we come back one and every five people in the world is Chinese China’s population is four

Times that of the US and the country is vast 3.7 million square miles it overlooks the Taiwan straight where half the World’s Trade flows every day and is located about 100 100 miles away from Taiwan President XI likes to say that the East is rising the West is declining

But economically the US is thriving compared to China in December Moody the credit rating agency cut its outlook for China to negative and it’s facing a long-term demographic bind a decline in the birth rate that experts say is irreversible meaning the country is both both aging and shrinking Ambassador Nicholas Burns took

Us on a tour starting in Beijing the story will continue in a moment the Ambassador and his wife Libby like to take early morning walks through a park near their Residence this is a 600-year old Ming Dynasty Park called Ron Park it’s a place for a lot of retirees and a lot of young people and it’s tremendously active it’s where the locals come for their early morning routines like Tai Chi yo-yoing and pingpong oops [Laughter] T you couldn’t tell from these scenes

Whoa that China where the covid pandemic began is still emerging from the trauma of President XI jinping’s oppressive zeroo policy Burns 68 a career Diplomat who has served in both Republican and Democratic administrations got to China at the height of the zero covid lockdowns and quarantines when my wife

Libby and I arrived here in early March of 2022 we were quarantine in this house for 21 days for 3 weeks Shanghai a city of 26 million people was completely locked down 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 had Americans who wanted to get out but had to find a way out of their locked compounds to the airport so zero Co worked for a while in 20 and 21 they had

Very low or Rel relatively lower infection rates but by 2022 it had really divided this Society it set off rare widespread protests then in December of 2022 president XI ended the policy abruptly the last thing this government is going to accept here is volatility volatility is something yorg

Woodka a German businessman who’s lived and worked in China for over 30 years hadn’t seen since the tianan square Square Uprising in 1989 he represents BASF the world’s largest chemical producer you have said this is a PTSD country post-traumatic stress disorder country what what do you mean well

Everybody has been traumatized by the lockdowns that took place in many cities across China and the kind of messaging that came out of the leadership it’s for your own safety and then the lockdown was lifted actually it was more a capitulation from the government the lockdown basically left and like aam we

Were wrong we’re going to lift it they never said they were wrong that’s not the system this admit that they did something wrong and then you basically like a tsunami Co was rolling across the country after they lifted it uh December January I would say a billion people

Were infected and certainly lots of people died independent analysts say that an estimated 1.4 million people died this kind of environment really Chang changes your attitude towards life and in business we thought we’re going to have a comeback story and we had a good couple of weeks and then the

Economy basically has been fled since you know after covid in the west in the United States particularly we did have a huge quick rebound Why didn’t it happen here well I think that Co also has covered up a couple of long-term problems that China has been building up

For example in the real estate sector we reported on the real estate sector 10 years ago with astonishing sites like this of empty buildings in city after city across the country this is today similar hollowed out wastelands of unoccupied and unfinished Apartments known as ghost

Cities when I was here 10 years ago I never expected to see these building still here but was a housing bubble back then grew and finally exploded this real estate crisis lies at the heart of China’s economic decline has anybody counted up the number of empty units I mean across the whole

Country well the whole of Germany we have 82 million people could move in here right away 80 80 to 90 million apartments are empty 80 to 90 million apartments are empty right unfinished over the years Chinese Banks readily loan money to the developers as the building boom created millions of jobs

And propelled China’s growth but in 2020 the government under President XI clamped down on the rampant borrowing causing the major developers to default on their loans and run out of money look at that the facade isn’t even finished he says they couldn’t even afford to take down the

Cranes in January ever Grand once China’s largest developer was ordered to liquidate its remaining assets left in the Lurch are millions of Chinese citizens who bought these apartments before they were built the developers owe their uh customers that paid up uh to the magnitude of1 trillion

Us so if I did a down payment on one of these apartments right will I ever see that money no you will not see the money it’s gone it’s finished is finished so I mean it’s it’s really dramatic 10 years ago we were told that this was the way

People put money down for their nest EG right for their retirement fund is that still the case the 66% 23 of a Family household average wealth is in in apartments that loss of wealth has depressed consumer spending and drag down the economy we wondered if the people blame president XI for that or

For 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 we were able to learn as yorg woodka who’s lived here for 30 years told us it’s not a good idea to bet

Against the Chinese people what are some of the positive aspects of the economy here they do have a strong uh manufacturing base still well the big part is really between the ears of people the brains of the Chinese entrepreneurs that actually made this success story happen China is not really

Good in basic research but they’re fantastic in development they’re world champion in actually making products better faster and cheaper are they better yes they are in some areas our Chinese competitors are breathing down our neck and basically Drive some of us out the market for instance China now

Makes over 80% of all the solar panels in the world dominates the winter turbine Market is poised to overtake Japan as the world’s biggest exporter of cars and more they’re the leading trade partner of twice as many countries in the world as the United States so they

Have leading trade partner with over 60 countries in the world and now with heavy government subsidies it is fast becoming the leader in electric vehicles last quarter the car maker byd surpassed Tesla as the bestselling EV maker in the world Shanghai based Neo is trying to break through with high-tech

Innovations in December the company unveiled a new battery with a driving range of 620 miles more than 200 M further than Tesla’s topend model this is this is our Flagship William Lee the CEO and founder of Neo says its battery swap technology allows owners to swap out their depleted

Battery for a fully charged one in under 3 minutes exactly it’s a uh two and a half minutes two and a half minut and a half yes we already installed 2,200 swap station around China China is also developing a humanoid robot industry look at that after lot of year

It’s true Alex goo is the founder and CEO of forier intelligence hi there last year he launched the gr1 his first generation humanoid we can do arm you can swing the arm yeah you see oh look at the fingers oh my word can you play the piano yeah future

Definitely in the future also in the future he says the robots could provide health care for China’s rapidly aging population maybe we can for example we can remote control such kind of robots to help my grandpa for example yeah I think president XI who visited this company last year has called for the

Mass production of humanoids by 2025 in his annual New Year’s speech he talked about the country’s economic woes and for the first time acknowledged the high unemployment rate still he has laid out a long-term goal of doubling China’s economy by 2035 and surpassing the West in technology our companies and Tech

Experts are competing on AI and biotech and Quantum mathematics all those technological advances will lead to a new generation of military technology our two militaries are vying for military Supremacy who’s going to be the most powerful in the most important strategic part of the world which is the Indo

Pacific presidents Biden and she met in San Francisco in November in hopes of reestablishing military Communications between our two countries which China had cut off I think we’re back to a more settled and stable relationship between the two countries but it’s been a roller coaster the low point he says was the

Spy balloon incident last year but there’s also been the buildup of military bases in the South China Sea the increase of air sorties near Taiwan and the buzzing of US military planes do you see a lowering of the temperature in the South China Sea no and that’s a

Problem you don’t and then on Taiwan following speaker Pelosi’s visit we’ve seen now for 16 months a much higher rate of Chinese both air activity and Naval activity that’s very intimidating meant to intimidate that hasn’t the taiw they haven’t pulled back 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 world where the Chinese are the dominant country when the Cold War ended we all thought our system had won yeah you know their system failed our

System rose up now he’s come back and said no no the Communist system is the right way I guess we didn’t bury that after all you know it’s it’s interesting to compare the old cold war with this time what distinguishes this time versus the old Cold War Soviet Union had a

Strong military and nuclear weapons it had a very weak economy which in no way competed with ours China’s economy is very strong we’re dealing with an adversary a competitor in China stronger than the Soviet Union was in the 1940s 50s 60s 7s and ‘ 80s so if that was a

Cold War what are you calling this it’s a competition of ideas a battle of ideas our idea America’s big 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’s a battle here as to whose

Ideas should lead the world and we believe those are American ideas up and get married Leslie stall on witnessing China change while reporting for 60 minutes this was different from the other times I’ve been there reporting at 60 minutes overtime.com

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