WEBVTT 0:00:07.680 --> 0:00:15.599 getting into China is all but impossible for most western journalists this is the financial and economic capital of China 0:00:15.599 --> 0:00:24.000 but when the US ambassador Nicholas Burns invited us to come for a visit and an interview we were granted visas is it 0:00:24.000 --> 0:00:29.199 our most competitive relationship in the world right now this is the most 0:00:29.199 --> 0:00:35.520 important most competitive and most dangerous relationship that the United States has in the world right now and 0:00:35.520 --> 0:00:42.800 will I think for the next decade or so what happens if Vladimir Putin enters 0:00:42.800 --> 0:00:49.280 another country besides Ukraine by force he already has 15 years ago Russia 0:00:49.280 --> 0:00:57.359 invaded neighboring Georgia it has military stationed there and controls 20% of the country what's next the 0:00:57.359 --> 0:01:05.960 Russians are buying Apartments here in every 33 minutes and they're registering a business in every 26 minutes so we're 0:01:05.960 --> 0:01:13.360 on the brink of very dangerous situation here in Georgia I'm Leslie stall I'm Bill 0:01:13.360 --> 0:01:19.560 Whitaker I'm Anderson Cooper I'm Sharon alony I'm John wory I'm Cecilia Vega I'm 0:01:19.560 --> 0:01:26.079 Scott Pell those stories tonight on 60 Minutes 0:01:31.920 --> 0:01:38.799 American CEOs used to Swoon over China its vast pool of consumers has been a 0:01:38.799 --> 0:01:44.880 magnetic draw for decades but doing business there has become so fraught and 0:01:44.880 --> 0:01:51.520 risky with intellectual property theft and an expanded Espionage law used to 0:01:51.520 --> 0:01:56.719 intimidate the business community that us companies have pressed the pause 0:01:56.719 --> 0:02:03.240 button on top of that the US China relationship has become contentious due 0:02:03.240 --> 0:02:09.800 partly to China's belligerent activity toward Taiwan and in the South China Sea 0:02:09.800 --> 0:02:15.720 the balloon spy incident of last year and the list goes on making matters 0:02:15.720 --> 0:02:23.239 worse the Chinese economy has hit a wall export growth is slowing the country's 0:02:23.239 --> 0:02:29.920 drowning in debt and youth unemployment has soared getting into China to tell 0:02:29.920 --> 0:02:35.280 tell that story is All But impossible for most western journalists but as we 0:02:35.280 --> 0:02:41.000 first reported in February when the US ambassador Nicholas Burns invited us to 0:02:41.000 --> 0:02:47.239 come for a visit and an interview we were granted visas we spoke with him at 0:02:47.239 --> 0:02:52.599 his residence in Beijing more money is leaving China for 0:02:52.599 --> 0:02:58.239 the first time in 40 years then is coming in from American Japanese 0:02:58.239 --> 0:03:03.480 European Korean investors now why is that and how much of a problem is that 0:03:03.480 --> 0:03:10.640 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 0:03:10.640 --> 0:03:16.080 foreign capital is important you ask why I think there's been a contradiction in 0:03:16.080 --> 0:03:22.280 the messaging from the government here in China to the rest of the world on the one hand they say we're open for 0:03:22.280 --> 0:03:27.840 business we want American CH Japanese businesses here but on the other hand 0:03:27.840 --> 0:03:34.560 they've rated six or seven American businesses since last March raid raid 0:03:34.560 --> 0:03:42.120 they've gone into American companies and shut them down and made accusations We Believe are very much unwarranted the 0:03:42.120 --> 0:03:48.680 American companies include banan company and the mince group a company that does 0:03:48.680 --> 0:03:56.959 due diligence for other companies that might want to invest here was raided last year five of its Chinese employees 0:03:56.959 --> 0:04:04.040 were taken into custody and they're still there another firm C Vision was raided L the 0:04:04.040 --> 0:04:10.319 message wasn't loud and clear a report about it was put on statun 0:04:10.319 --> 0:04:16.600 television it accused Western consulting firms of Espionage and stealing National 0:04:16.600 --> 0:04:21.639 Security and Military Secrets they want the investment to come back and they're 0:04:21.639 --> 0:04:28.360 raiding American companies and there they've passed an amendment to their counter Espionage law and it's written 0:04:28.360 --> 0:04:33.639 in such a general way that it could be that American Business people could be 0:04:33.639 --> 0:04:39.800 accused of Espionage for engaging in practices that are perfectly legal and 0:04:39.800 --> 0:04:46.160 acceptable everywhere else in the world collecting data to do due diligence so that you can decide whether you want to 0:04:46.160 --> 0:04:53.080 invest in a company or form a joint venture right what do you think the Chinese are afraid that these companies 0:04:53.080 --> 0:04:58.280 are going to find out these due diligence companies what are they worrying about 0:04:58.280 --> 0:05:05.280 you know I think they want to control data about the Chinese people about Chinese companies and so U that I think 0:05:05.280 --> 0:05:11.160 is at the heart of the problem with those American companies operating in that sphere Ambassador Burns told us 0:05:11.160 --> 0:05:18.440 that's just one of the concerns he hears about there is still intellectual property theft from American companies 0:05:18.440 --> 0:05:25.440 here is every American company afraid of that yes all kinds of us companies began 0:05:25.440 --> 0:05:31.280 flocking to China in the early 1980s after the country open to the West 0:05:31.280 --> 0:05:39.080 under then leader D sha ping and now US banks operate here Walmart has nearly 0:05:39.080 --> 0:05:45.000 300 stores across the country Shoppers here in Shanghai can buy 0:05:45.000 --> 0:05:53.280 Levis browse in an Apple store and get a caramel frappuccino Starbucks has 6,000 0:05:53.280 --> 0:05:58.800 stores in China a thousand stores in Shanghai and they want to keep building 0:05:58.800 --> 0:06:04.120 because coffee this was a tea culture for hundreds of years it's now becoming 0:06:04.120 --> 0:06:10.400 at least with the young Chinese a coffee culture and they love Starbucks they love Starbucks and I'll buy you a 0:06:10.400 --> 0:06:18.080 cappuccino I'll take one thank you Boeing's here so is Tesla fizer Chevron 0:06:18.080 --> 0:06:23.120 Intel but while some businesses are thriving many of the foreign companies 0:06:23.120 --> 0:06:28.199 are worried about the business climate under President Xi Jinping if you track 0:06:28.199 --> 0:06:35.599 China from the death of ma to the opening of China to the world we've seen 0:06:35.599 --> 0:06:42.880 a closing of sorts we've seen a centralization of power of the party we've seen increased repression of the 0:06:42.880 --> 0:06:50.680 people of China here that's a very significant Trend just over the last decade with shei under his leadership 0:06:50.680 --> 0:06:55.960 part of that Trend includes president xi's reversing many of the market 0:06:55.960 --> 0:07:01.680 reforms that Unleashed China's economic Miracle they've been growing over 40 0:07:01.680 --> 0:07:07.199 years the fastest growth rate in recorded economic history 8 9 10 11% 0:07:07.199 --> 0:07:13.039 growth rates they've lifted 800 million people out of poverty but what's happening is that growth rate is slowing 0:07:13.039 --> 0:07:18.599 down most economists are now projecting they'll be at 2 three 4% growth maybe 0:07:18.599 --> 0:07:25.599 even lower in the next support their society if it's that low that's going to be difficult for them if there was so 0:07:25.599 --> 0:07:32.199 much explosive growth if so many people were lifted out of poverty why is he 0:07:32.199 --> 0:07:37.240 turning away from what worked well I think they've got maybe competing 0:07:37.240 --> 0:07:43.599 priorities the government here in China certainly wants the economy to grow but they also have a national security 0:07:43.599 --> 0:07:49.520 mindset they want to control data they want that's more important the control 0:07:49.520 --> 0:07:55.520 right than economic growth it seems that way I think it's open for debate you're 0:07:55.520 --> 0:08:01.800 hearing we are hearing both messages it sounds as if you yourself don't know the 0:08:01.800 --> 0:08:07.280 direction it's going what I perceive here is that the greater energy is with 0:08:07.280 --> 0:08:15.000 those on the National Security side of the government of China good morning how are you on a train trip from Beijing to 0:08:15.000 --> 0:08:21.560 Shanghai the Ambassador pointed out that in the decades before President XI China 0:08:21.560 --> 0:08:30.840 powered its economy by investing in these high-speed trains roads factories and skyscrapers 0:08:30.840 --> 0:08:37.240 that light up Shanghai the financial capital of China but under President XI 0:08:37.240 --> 0:08:43.279 China lost more than $120 billion worth of long-term foreign investments last 0:08:43.279 --> 0:08:48.399 year because of the weakening economy and the harsh government tactics which 0:08:48.399 --> 0:08:56.120 have left American companies uncertain of the future there there are a lot of American companies here have a lot of 0:08:56.120 --> 0:09:03.079 them just picked up and left because of this current business environment you know that's interesting not many not 0:09:03.079 --> 0:09:10.920 many not many why not China is the second largest economy in the world it's a big market so a few American companies 0:09:10.920 --> 0:09:16.519 have left but most have stayed some American companies are moving at least 0:09:16.519 --> 0:09:23.240 some of their operations to Singapore Vietnam Mexico but they're not leaving 0:09:23.240 --> 0:09:29.480 China the market irresistible to American Business people it's gigant 0:09:29.480 --> 0:09:36.120 antic maybe they're not leaving but they're not investing they're not making major Investments until they can see 0:09:36.120 --> 0:09:41.920 exactly where the government is head it yet because of the 1.4 billion potential 0:09:41.920 --> 0:09:48.240 consumers some companies like Disney are increasing their investment welcome to 0:09:48.240 --> 0:09:53.959 Shanghai Disney Resort it recently expanded its Shanghai Disneyland that 0:09:53.959 --> 0:10:00.079 they told us is thriving aptar a $9 billion company 0:10:00.079 --> 0:10:08.279 headquartered in Crystal Lake Illinois is another American firm bucking the trend of capital flight president of 0:10:08.279 --> 0:10:15.440 aptar Asia shangu gang a chinese-born US citizen showed us around one of their 0:10:15.440 --> 0:10:22.360 five manufacturing sites in China we are manufacturing for some of the largest US 0:10:22.360 --> 0:10:27.399 Brands actually the US consumer Brands this factory makes the packaging and 0:10:27.399 --> 0:10:32.720 dispensing devices for food food pharmaceutical and beauty products sold 0:10:32.720 --> 0:10:40.279 in Asia all of our customers like PNG L'Oreal they're all here doing business 0:10:40.279 --> 0:10:47.320 abtar in China for nearly 30 years recently invested $60 million in a new 0:10:47.320 --> 0:10:53.760 Factory shangu gang says even in a slowing economy the company is doing 0:10:53.760 --> 0:10:59.320 well American companies here as the Ambassador well knows are pausing or 0:10:59.320 --> 0:11:06.000 cutting back on investment but not this firm you're expanding well um because we 0:11:06.000 --> 0:11:13.480 are here for the longterm and we believe in the consumption Power Of The Rising middle class it's 1.4 billion people 0:11:13.480 --> 0:11:18.560 here and um imagine for for example health care and the same with um 0:11:18.560 --> 0:11:25.720 cosmetics and beauty and um beverage all all those sectors packaged Foods these are really the biggest market and so so 0:11:25.720 --> 0:11:33.440 we are very confident about uh the long term what does it say about the confidence really in the US 0:11:33.440 --> 0:11:40.079 China relationship it it seems to say you believe that that things will what 0:11:40.079 --> 0:11:45.399 I'm asking get better that's a great question for the 0:11:45.399 --> 0:11:51.920 Ambassador I believe so I hope so you know we'll see actually burn says he's 0:11:51.920 --> 0:11:57.480 wary of the future as the fundamental rivalry and mistrust between the US and 0:11:57.480 --> 0:12:02.839 China is shaking the confidence of the business world and has pushed our 0:12:02.839 --> 0:12:09.360 relationship to its lowest point in half a century is it our most competitive 0:12:09.360 --> 0:12:15.320 relationship in the world right now this is the most important most competitive 0:12:15.320 --> 0:12:20.920 and most dangerous relationship that the United States has in the world right now and will I think for the next decade or 0:12:20.920 --> 0:12:27.600 so I want to quote you back to you and tell us what you meant you have said 0:12:27.600 --> 0:12:32.880 divorce is not an option right our two countries have to live 0:12:32.880 --> 0:12:38.839 together and this I think is the greatest tension in the US China relationship China's our most 0:12:38.839 --> 0:12:44.440 significant competitor and at the same time China is our third largest trade 0:12:44.440 --> 0:12:51.000 partner 750,000 American jobs at stake agriculture China's the largest market 0:12:51.000 --> 0:12:57.320 for us agriculture 1 of all of our export products from agriculture are 0:12:57.320 --> 0:13:04.480 sent to China that was 40 .9 billion last year so we can't afford really to 0:13:04.480 --> 0:13:09.800 have a real break here well it's compc jobs would it's complicated some people 0:13:09.800 --> 0:13:18.639 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 0:13:18.639 --> 0:13:25.160 wouldn't be able to put dinner on the table and so this makes for an extraordinarily difficult Balancing Act 0:13:25.160 --> 0:13:31.120 in my job you're a willinda brother I've never thought of myself that way but 0:13:31.120 --> 0:13:38.199 high wire right well we have competing interests here and balancing those interests is the reality in the US China 0:13:38.199 --> 0:13:44.760 relationship we're going to compete we have to compete responsibly and keep the peace between our countries but we also 0:13:44.760 --> 0:13:51.839 have to engage more about The Balancing Act and the biggest economic problem in China 0:13:51.839 --> 0:13:56.440 today when we come back 0:14:02.719 --> 0:14:09.720 one in every five people in the world is Chinese China's population is four times 0:14:09.720 --> 0:14:17.160 that of the US and the country is vast 3.7 million square miles it overlooks 0:14:17.160 --> 0:14:22.720 the Taiwan straight where half the World's Trade flows every day and is 0:14:22.720 --> 0:14:28.320 located about 100 miles away from Taiwan President XI likes to say that 0:14:28.320 --> 0:14:35.480 the East is Rising the West is declining but economically the US is thriving 0:14:35.480 --> 0:14:41.240 compared to China in December Moody's the credit rating agency cut its outlook 0:14:41.240 --> 0:14:47.839 for China to negative and it's facing a long-term demographic bind a decline in 0:14:47.839 --> 0:14:53.399 the birth rate that experts say is irreversible meaning the country is both 0:14:53.399 --> 0:15:00.079 aging and shrinking Ambassador Nicholas Burns took us on a tour starting in 0:15:00.079 --> 0:15:06.800 Beijing the Ambassador and his wife Libby like to take early morning walks through a park near their 0:15:06.800 --> 0:15:14.480 [Music] residence this is a 600y old Ming 0:15:14.480 --> 0:15:21.560 Dynasty Park called Ron Park it's a place for a lot of retirees and a lot of young people and it's tremendously 0:15:21.560 --> 0:15:30.920 active it's where the locals come for their early morning routines like Tai Chi 0:15:30.920 --> 0:15:36.620 yo-yoing and pingpong 0:15:36.620 --> 0:15:42.680 [Laughter] oops you couldn't tell from these 0:15:42.680 --> 0:15:49.680 scenes that China where the co pandemic began is still emerging from the trauma 0:15:49.680 --> 0:15:58.639 of President XI jinping's oppressive zeroo policy Burns 68 a career Diplomat who is 0:15:58.639 --> 0:16:05.759 serving in both Republican and Democratic administrations got to China at the height of the zero covid 0:16:05.759 --> 0:16:11.360 lockdowns and quarantines when my wife Libby and I arrived here in early March 0:16:11.360 --> 0:16:17.560 of 2022 we were quarantined in this house for 21 days for 3 weeks Shanghai a 0:16:17.560 --> 0:16:24.000 city of 26 million people was completely locked down for 63 days what was that 0:16:24.000 --> 0:16:31.279 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 0:16:31.279 --> 0:16:39.079 Americans who wanted to get out but had to find a way out of their locked compounds to the airport so zero Co 0:16:39.079 --> 0:16:44.440 worked for a while in 20 and 21 they had very low or relatively lower infection 0:16:44.440 --> 0:16:51.880 rates but by 2022 it had really divided this Society it set off rare widespread 0:16:51.880 --> 0:16:59.120 protests then in December of 2022 president XI ended the policy abruptly 0:16:59.120 --> 0:17:05.280 the last thing this government is going to accept here is volatility volatility is something yorg 0:17:05.280 --> 0:17:10.959 woodka a German businessman who's lived and worked in China for over 30 years 0:17:10.959 --> 0:17:19.798 hadn't seen since the tianan square Uprising in 1989 he represents BASF the world's 0:17:19.799 --> 0:17:26.000 largest chemical producer you have said this is a PTSD country post-traumatic 0:17:26.000 --> 0:17:31.679 stress disorder country what what do you mean well everybody has been traumatized by 0:17:31.679 --> 0:17:37.480 the lockdowns that took place in many cities across China and the kind of messaging that came out of the 0:17:37.480 --> 0:17:43.679 leadership it's for your own safety and then the lockdown was lifted actually it was more a capitulation from the 0:17:43.679 --> 0:17:50.440 government the lockdown basically left and like a we were wrong we're going to lift it they never said they were wrong 0:17:50.440 --> 0:17:56.600 that's not the system to admit that they did something wrong and then you basically like a tsunami Co was rolling 0:17:56.600 --> 0:18:03.280 across the country after they lifted it uh December January I would say a billion people were infected and 0:18:03.280 --> 0:18:11.600 certainly lots of people died independent analysts say that an estimated 1.4 million people died this 0:18:11.600 --> 0:18:17.440 kind of environment really changes your attitude towards life and in business we thought we're going to have a comeback 0:18:17.440 --> 0:18:25.600 story and we had a good couple of weeks and then the economy basically has been fled since you know after covid in the 0:18:25.600 --> 0:18:31.440 west in the United States particularly we did have a huge quick rebound Why 0:18:31.440 --> 0:18:37.679 didn't it happen here well I think that Co also has covered up a couple of long-term problems that China has been 0:18:37.679 --> 0:18:44.760 building up for example in the real estate sector we reported on the real estate Sector 10 years ago with 0:18:44.760 --> 0:18:51.760 astonishing sites like this of empty buildings in city after city across the 0:18:51.760 --> 0:18:58.880 country this is today similar hollowed out wastelands of unoccupied and un 0:18:58.880 --> 0:19:04.720 finished Apartments known as ghost cities when I was here 10 years ago I 0:19:04.720 --> 0:19:11.080 never expected to see these buildings still here but was a housing bubble back 0:19:11.080 --> 0:19:17.720 then grew and finally exploded this real estate crisis lies at 0:19:17.720 --> 0:19:24.400 the heart of China's economic decline has anybody counted up the number of 0:19:24.400 --> 0:19:31.200 empty units I mean across the whole country well the whole of German we have 82 million people could move in here 0:19:31.200 --> 0:19:37.559 right away 80 80 to 90 million apartments are empty 80 to 90 million 0:19:37.559 --> 0:19:43.960 apartments are empty right I'm finished over the years Chinese Banks readily 0:19:43.960 --> 0:19:49.799 loan money to the developers as the building boom created millions of jobs 0:19:49.799 --> 0:19:55.799 and propelled China's growth but in 2020 the government under President XI 0:19:55.799 --> 0:20:01.000 clamped down on the rampant borrowing causing the major developers to default 0:20:01.000 --> 0:20:07.440 on their loans and run out of money look at that the facade isn't even finished 0:20:07.440 --> 0:20:14.240 he says they couldn't even afford to take down the cranes in January ever Grand once 0:20:14.240 --> 0:20:22.360 China's largest developer was ordered to liquidate its remaining assets left in the Lurch are millions of 0:20:22.360 --> 0:20:27.559 Chinese citizens who bought these apartments before they were built the 0:20:27.559 --> 0:20:32.720 developers ow the are uh customers that paid up uh to the magnitude of1 trillion 0:20:32.720 --> 0:20:39.120 us so if I did a down payment on one of these apartments right will I ever see 0:20:39.120 --> 0:20:45.320 that money no you will not see the money it's gone it's finished it's gone it's finished so I mean it's it's really 0:20:45.320 --> 0:20:51.000 dramatic 10 years ago we were told that this was the way people put money down 0:20:51.000 --> 0:20:56.360 for their nest egg right for their retirement fund is that still the case 0:20:56.360 --> 0:21:04.080 the 66% 23 of Family household average wealth is in in apartments that loss of 0:21:04.080 --> 0:21:10.200 wealth has depressed consumer spending and drag down the economy we wondered if 0:21:10.200 --> 0:21:15.720 the people blame president XI for that or for the covid deaths but it was 0:21:15.720 --> 0:21:20.960 impossible for us to gauge public opinion or if it even matters while no 0:21:20.960 --> 0:21:27.960 one from the government would give us an interview we were able to learn as yorg woodka who's lived here for 30 years 0:21:27.960 --> 0:21:34.039 told us it's not a good idea to bet against the Chinese people what are some of the 0:21:34.039 --> 0:21:40.720 positive aspects of the economy here they do have a strong U manufacturing 0:21:40.720 --> 0:21:46.960 base still well the big part is really between the ears of people the brains of the Chinese entrepreneurs that actually 0:21:46.960 --> 0:21:52.880 made this success story happen China is not really good in basic research but they're fantastic in development they're 0:21:52.880 --> 0:21:59.799 world champion in actually making products better faster and cheaper are they better yes they are some areas our 0:21:59.799 --> 0:22:06.799 Chinese competitors are breathing down our neck and basically Drive some of us out the market for instance China now 0:22:06.799 --> 0:22:13.000 makes over 80% of all the solar panels in the world it dominates the wind 0:22:13.000 --> 0:22:19.360 turbine market and last year became the world's biggest exporter of cars and 0:22:19.360 --> 0:22:24.880 more they're the leading trade partner of twice as many countries in the world 0:22:24.880 --> 0:22:30.080 as the United States so they have leading trade Aid partner with over 60 0:22:30.080 --> 0:22:35.480 countries in the world and now with heavy government subsidies it is fast 0:22:35.480 --> 0:22:42.480 becoming a leader in electric vehicles the car maker byd is vying with Tesla 0:22:42.480 --> 0:22:49.559 for the title of best-selling EV maker in the world Shanghai based Neo is trying to 0:22:49.559 --> 0:22:57.039 break through with high-tech Innovations in December the company unveiled a new battery with a driving 0:22:57.039 --> 0:23:02.080 range of 6 20 M more than 200 M further 0:23:02.080 --> 0:23:09.039 than Tesla's topend model this is this is our Flagship William Lee the CEO and 0:23:09.039 --> 0:23:15.080 founder of Neo says its battery swap technology allows owners to swap out 0:23:15.080 --> 0:23:21.480 their depleted battery for a fully charged one in under 3 minutes exactly 0:23:21.480 --> 0:23:26.880 it's a uh two and a half minutes two and a half minutes two and a half yes we 0:23:26.880 --> 0:23:33.640 already installed 2,200 swap station around 0:23:33.640 --> 0:23:39.960 China China is also developing a humanoid robot 0:23:39.960 --> 0:23:45.440 industry look at that after lots of year it's coming true Alex goo is the founder 0:23:45.440 --> 0:23:51.559 and CEO of forier intelligence hi there last year he launched the 0:23:51.559 --> 0:23:58.200 gr1 his first generation humanoid we can do arm you can swing the 0:23:58.200 --> 0:24:06.320 arm yeah you see oh look at the fingers oh my word can you play the piano yeah future 0:24:06.320 --> 0:24:11.720 definitely can in the future also in the future he says the robots could provide 0:24:11.720 --> 0:24:18.720 health care for China's rapidly aging population maybe we can for example we 0:24:18.720 --> 0:24:26.159 can remote control such kind of robot to help my grandpa for example yeah I think 0:24:26.159 --> 0:24:31.320 president shei who visited this company last year has called for the mass 0:24:31.320 --> 0:24:38.919 production of humanoids by 2025 in his annual New Year's speech he 0:24:38.919 --> 0:24:44.360 talked about the country's economic woes and for the first time acknowledged the 0:24:44.360 --> 0:24:50.559 high unemployment rate still he has laid out a long-term goal of doubling China's 0:24:50.559 --> 0:24:57.919 economy by 2035 and surpassing the West in technology our companies and Tech 0:24:57.919 --> 0:25:04.399 experts are competing on AI and biotech and Quantum mathematics all those 0:25:04.399 --> 0:25:09.480 technological advances will lead to a new generation of military technology 0:25:09.480 --> 0:25:15.480 our two militaries are vying for military Supremacy who's going to be the most powerful in the most important 0:25:15.480 --> 0:25:21.399 strategic part of the world which is the Indo Pacific presidents Biden and she met in 0:25:21.399 --> 0:25:27.120 San Francisco in November in hopes of reestablishing military Communications 0:25:27.120 --> 0:25:34.159 between our two countries which China had cut off I think we're back to a more settled and stable 0:25:34.159 --> 0:25:40.880 relationship between the two countries but it's been a roller coaster the low point he says was the Spy balloon 0:25:40.880 --> 0:25:46.039 incident last year but there's also been the buildup of military bases in the 0:25:46.039 --> 0:25:52.480 South China Sea the increase of air sorties near Taiwan and the buzzing of 0:25:52.480 --> 0:25:58.520 US military planes do you see a lowering of the temperature in the South China 0:25:58.520 --> 0:26:04.440 see no and that's a problem you don't and then on Taiwan following speaker 0:26:04.440 --> 0:26:11.799 Pelosi's visit we've seen now for 16 months a much higher rate of Chinese both air activity and Naval activity 0:26:11.799 --> 0:26:18.919 that's very intimidating meant to intimate and that hasn't they haven't pulled back on that 0:26:18.919 --> 0:26:26.000 and I think ultimately they want to become and overtake the United States as the dominant country globally and we 0:26:26.000 --> 0:26:31.480 don't want that to happen we don't want to live in a world world where the Chinese are the dominant country when 0:26:31.480 --> 0:26:38.279 the Cold War ended we all thought our system had won yeah you know their 0:26:38.279 --> 0:26:45.120 system failed our system rose up now he's come back and said no no the 0:26:45.120 --> 0:26:50.840 Communist system is the right way I guess we didn't bury that after all you 0:26:50.840 --> 0:26:57.679 know it's it's interesting to compare the old cold war with this time what distinguishes this time versus the old 0:26:57.679 --> 0:27:04.640 Cold War Soviet Union had a strong military and nuclear weapons it had a very weak 0:27:04.640 --> 0:27:11.360 economy which in no way competed with ours China's economy is very strong 0:27:11.360 --> 0:27:16.559 we're dealing with an adversary a competitor in China stronger than the 0:27:16.559 --> 0:27:23.320 Soviet Union was in the 1940s 50s 60s 7s and 80s so if that was a Cold War what 0:27:23.320 --> 0:27:31.360 are you calling this it's a competition of ideas a battle of ideas our idea 0:27:31.360 --> 0:27:37.320 America's big idea of a Democratic Society and human Freedom versus China's 0:27:37.320 --> 0:27:42.840 idea that a communist state is stronger than a democracy we don't believe that 0:27:42.840 --> 0:27:48.519 so there's a battle here as to whose ideas should lead the world and we 0:27:48.519 --> 0:27:53.760 believe those are American ideas the latest salvos in the battle 0:27:53.760 --> 0:28:02.159 for Supremacy came last month when China conducted two days of large scale war games around Taiwan 0:28:02.159 --> 0:28:09.240 and President Biden imposed new stiff tariffs including a 100% tax on Chinese 0:28:09.240 --> 0:28:16.360 electric vehicles up and get married Leslie stall 0:28:16.360 --> 0:28:22.919 un witnessing China change while reporting for 60 minutes this was different from the other times I've been 0:28:22.919 --> 0:28:28.640 there reporting at 60 Minutes overtime.com sponsored by ntek ODT some 0:28:28.640 --> 0:28:30.880 of the 0:28:35.519 --> 0:28:40.880 retail the day Russia invaded one of its neighbors waged a bloody war and seized 0:28:40.880 --> 0:28:47.760 a fifth of that neighbor's territory fear and shock rippled throughout the region we're not talking about Russia's 0:28:47.760 --> 0:28:52.919 invasion of Ukraine rather the small country of Georgia that invasion was 0:28:52.919 --> 0:28:58.640 more than 15 years ago Vladimir Putin's Playbook hasn't changed much today 0:28:58.640 --> 0:29:04.320 Georgia which shares a 556 mile border with Russia is still trying to remove 0:29:04.320 --> 0:29:09.600 the grip of the Kremlin days after Russia invaded Ukraine Georgia submitted 0:29:09.600 --> 0:29:17.279 an application to become part of the European Union with hopes of gaining a western insurance policy to protect it 0:29:17.279 --> 0:29:22.640 last October we met with the president of Georgia Salam zor bash the daughter 0:29:22.640 --> 0:29:28.480 of Georgian refugees raised in Paris she says that Vladimir Putin has launched a 0:29:28.480 --> 0:29:36.440 invasion of Georgia in an attempt to extend Russia's reach the war in Ukraine is now moving 0:29:36.440 --> 0:29:43.159 into its third year how is the war there impacting life here it is of course a 0:29:43.159 --> 0:29:49.799 reminder of everything that this country has gone through uh and of the fact that 0:29:49.799 --> 0:29:58.080 it's always uh an immediate uh danger and threat it's uh already part of the 0:29:58.080 --> 0:30:04.159 the reality that Russia is testing the ground you think the Russians are testing the ground right now in Georgia 0:30:04.159 --> 0:30:11.799 right now how so here uh their way their easy way uh is the hybrid 0:30:11.799 --> 0:30:17.039 War a hybrid war that has included online and televised disinformation 0:30:17.039 --> 0:30:24.919 campaigns and anti-western propaganda pumped into Georgia a favorite tactic of the Kremlin 0:30:24.919 --> 0:30:30.159 Georgians have seen it before in 2008 three weeks before Russia launched its 0:30:30.159 --> 0:30:37.399 first air strike in Georgia Moscow hit the country with a series of cyber attacks the five-day bloody battle that 0:30:37.399 --> 0:30:43.240 followed ended with Russia seizing 20% of Georgia's land president zor bash 0:30:43.240 --> 0:30:49.760 says the mostly muted International reaction to that war laid the groundwork for Russia's invasion of Ukraine and 0:30:49.760 --> 0:30:54.840 Vladimir Putin's plan to bring former Soviet republics back into the Russian 0:30:54.840 --> 0:31:00.880 fold today a fifth of Georgia is occupied by the Russian military and an 0:31:00.880 --> 0:31:07.799 estimated 8,000 Russian troops are inside the Georgian border we traveled with Georgian 0:31:07.799 --> 0:31:13.399 Security Forces 37 Mi outside the capital of toi into the Tiny Village of 0:31:13.399 --> 0:31:20.120 caletti today it is a rural No Man's Land oh 0:31:20.120 --> 0:31:25.960 my across a rickety Bridge we found an abandoned stretch of Farmland choked off 0:31:25.960 --> 0:31:32.440 by barbed wire warning sign to stay out oh there she is and a defiant 0:31:32.440 --> 0:31:40.080 87-year-old Valia Benes V the Russians have told me this is our 0:31:40.080 --> 0:31:46.559 land and I said no our land is in Russia This Is Our Land not yours you have no 0:31:46.559 --> 0:31:52.039 rights here how long have you been surrounded by the barbed 0:31:52.039 --> 0:31:57.919 wire for 15 years in 2008 her land was seized by 0:31:57.919 --> 0:32:03.039 Russian troops the grandmother of four still refuses to surrender her home 0:32:03.039 --> 0:32:08.799 caught up from family she relies on Outsiders and a stick to deliver food 0:32:08.799 --> 0:32:16.120 and the medicine she needs she whispered to us that the Russians were watching us from over that Hill are you afraid of 0:32:16.120 --> 0:32:21.799 the Russians yes I'm afraid of 0:32:21.799 --> 0:32:27.639 them what if they take me and detain me nobody can help me I'm alone when it's 0:32:27.639 --> 0:32:35.320 only a couple of them I can always answer them and fight back but when it's a lot of them there is nothing I can 0:32:35.320 --> 0:32:40.720 do Georgia is bordered on the North by Russia the east by azerbijan and the 0:32:40.720 --> 0:32:45.799 South by Armenia and turkey the bridge between the black and Caspian Sea an 0:32:45.799 --> 0:32:52.880 important route for natural gas and oil high up in the mountains of Georgia we saw another reason the small country of 0:32:52.880 --> 0:32:58.799 nearly 4 million is crucial to the Kremlin a long line of Tri many of them 0:32:58.799 --> 0:33:05.360 carrying European cargo across the border into Russia United Nations data shows that since the War Began 0:33:05.360 --> 0:33:12.720 everything from Cars to chemicals have rolled into Russia through Georgia some in violation of Western sanctions a 0:33:12.720 --> 0:33:18.480 Lifeline for Putin's regime there is traffic coming into Georgia too 0:33:18.480 --> 0:33:24.919 thousands of Russian Nationals entering the country in cars and on foot extending for miles and arriving in 0:33:24.919 --> 0:33:30.600 waves first at the beginning of the Ukraine war in 2022 and again later that 0:33:30.600 --> 0:33:38.039 year when fighting age men fled Russia's mandated military service but some Georgians worry Putin loyalist could be 0:33:38.039 --> 0:33:45.919 entering the country too laying the groundwork for Russia's next move When Vladimir Putin invaded Ukraine 0:33:45.919 --> 0:33:52.760 in 2022 he said it was to among other things protect the Russians living there 0:33:52.760 --> 0:33:58.440 president zor bash fears Putin could launch a similar campaign in Georgia 0:33:58.440 --> 0:34:05.360 since the war Georgia has become home to a 100,000 Russians it's very unnerving 0:34:05.360 --> 0:34:13.520 when in your own country you have people that are talking the language of the enemy uh and that believe that they're 0:34:13.520 --> 0:34:19.560 at home the Russians believe that they are at home they're behaving and believing that they are very much at 0:34:19.560 --> 0:34:25.320 home uh so there's a fine line and that line has to be kept so that we do not 0:34:25.320 --> 0:34:30.638 have incidents in the future that would allow uh Russia to use their favored 0:34:30.639 --> 0:34:37.358 doctrine of protecting Russian speaking citizens so why doesn't Georgia just say 0:34:37.359 --> 0:34:44.638 no more Russians through our border a question for the authorities aren't you the authority no I don't have the 0:34:44.639 --> 0:34:51.358 executive powers and unfortunately the executive power to control Georgia's border was squarely in 0:34:51.359 --> 0:34:58.359 the hands of its prime minister Iraqi gabish publicly he said that he 0:34:58.359 --> 0:35:05.680 supported the country's bid to move away from neighboring Russia and join the European Union but his actions and 0:35:05.680 --> 0:35:11.200 inactions told a different story since the Ukraine Invasion prime minister gab 0:35:11.200 --> 0:35:16.280 Bashi agreed to resume flights between tii and Moscow for the first time in 0:35:16.280 --> 0:35:21.720 almost 5 years he's also failed to adopt strong sanctions against Russia critics 0:35:21.720 --> 0:35:29.200 of the Prime Minister accuse him of being in the pocket of a Georgian oligarch binaa even vely a billionaire 0:35:29.200 --> 0:35:35.880 who helped get him elected the 67-year-old oligarch made his fortune in Russia and served a brief stin as 0:35:35.880 --> 0:35:41.320 georg's prime minister his $50 million home looms over to bisi a reminder of 0:35:41.320 --> 0:35:47.040 his wealth and power in 2022 European lawmakers called for sanctions against 0:35:47.040 --> 0:35:53.960 the oligarch for his quote links to the Kremlin a connection that could undermine Georgia's EU bid we're going 0:35:53.960 --> 0:36:00.680 in with um a government that's completely corrupt a government that's Pro Russian clearly anti-western um 0:36:00.680 --> 0:36:09.680 clearly does not really care about what the majority of the population wants and needs anad and daim madad are members of 0:36:09.680 --> 0:36:16.319 the shame movement a group with thousands of young followers working towards Georgia's entry into the 0:36:16.319 --> 0:36:22.560 European Union if Russia wins it means loss of 0:36:22.560 --> 0:36:28.520 Freedom loss of everything that we fought for in the past 30 years basically it's a fight for values it's a 0:36:28.520 --> 0:36:34.200 fight for where you want to stand in this uh big fight for democracy as soon 0:36:34.200 --> 0:36:40.000 as West in any form be it the US partnership be it European Union is not 0:36:40.000 --> 0:36:45.599 represented in this country Russia will fill the void right away they say the 0:36:45.599 --> 0:36:51.000 influx of Russians is already changing the face of Georgia what are they doing 0:36:51.000 --> 0:36:56.440 if we look at it they're buying Apartments they're buying private property they're opening up businesses 0:36:56.440 --> 0:37:02.880 um their actions changed uh Georgian economy the Russians are buying 0:37:02.880 --> 0:37:09.319 Apartments here in every 33 minutes they're purchasing a piece of land in every 27 minutes and they're registering 0:37:09.319 --> 0:37:16.240 a business in every 26 minutes so I think we're on the brink of very 0:37:16.240 --> 0:37:23.119 dangerous situation here in Georgia according to public records Russians have registered more than 20,000 0:37:23.119 --> 0:37:28.520 businesses in Georgia over the last 2 years and launched five new Russian only 0:37:28.520 --> 0:37:36.240 schools none of which are licensed by Georgia's Department of Education Russians have driven rent up nearly 0:37:36.240 --> 0:37:42.880 130% prices for everything from food to cars have gone up 7% over a 100,000 0:37:42.880 --> 0:37:49.359 Georgians have left the country because many of them can't afford to live here anymore I've heard this described as a 0:37:49.359 --> 0:37:55.560 quiet Invasion quiet Invasion yeah there's a risk of the economic Divergence there's a risk of military 0:37:55.560 --> 0:38:01.520 intervention and there's a risk of uh Georgia's statehood being 0:38:01.520 --> 0:38:08.040 destroyed Emanuel LNF George smeno and pel bakov don't look like much of a 0:38:08.040 --> 0:38:14.839 threat all Russians in their 20s they fled their country for fear of being drafted or imprison for speaking out 0:38:14.839 --> 0:38:22.160 against Putin they now live in Georgia and work at this russian-owned comedy club in 0:38:23.000 --> 0:38:29.760 toi I TR said I'm against the war in Russia uh was beaten and uh after that 0:38:29.760 --> 0:38:36.280 go into prison uh three times so three times you went to jail uh yes yes three 0:38:36.280 --> 0:38:42.200 times I believe and I know that Russians actually against the war you think that 0:38:42.200 --> 0:38:47.960 most Russians are against the war yeah just scared really scared have any of you had any aggression towards you 0:38:47.960 --> 0:38:53.960 because you're Russian actually I have a big writing on the wall it is the biggest thing I see from my window just 0:38:53.960 --> 0:38:59.440 big Russians go home there is no subtlety in spray paint anti-russian 0:38:59.440 --> 0:39:04.640 graffiti blankets the city along with support for Ukraine on crumbling walls 0:39:04.640 --> 0:39:10.319 the Georgian flag is joined with those of the European Union the US and NATO 0:39:10.319 --> 0:39:15.640 over 80% of the Georgian public backs entry into the EU as does Georgian 0:39:15.640 --> 0:39:21.480 president zor bash but her position has become increasingly ceremonial as the 0:39:21.480 --> 0:39:28.920 country moves towards a parliamentary government after she went to Europe to try and pave the way for Georgia Zu bid 0:39:28.920 --> 0:39:34.760 prime minister aroi gabashvili accused her of violating the Constitution banned 0:39:34.760 --> 0:39:40.119 her from traveling to Europe and tried but failed to impeach her president zor 0:39:40.119 --> 0:39:45.240 bash has defiantly continued to fly to Europe to meet with leaders on her own 0:39:45.240 --> 0:39:51.839 dime it doesn't seem like the prime minister is interested in joining the EU 0:39:51.839 --> 0:39:58.960 well that's a question that the whole population is asking whether they really want it or whe whether it's s service 0:39:58.960 --> 0:40:05.599 this is a critical time do you feel like the West particularly the US has been 0:40:05.599 --> 0:40:10.800 responsive enough and supportive enough of Georgia in this 0:40:10.800 --> 0:40:17.640 moment I don't think so uh and I would take one concrete example uh I've been a 0:40:17.640 --> 0:40:25.319 president now for five years uh and I've not managed to have any form of meeting 0:40:25.319 --> 0:40:33.119 at my level which be be the president or the vice president uh even through a phone call I 0:40:33.119 --> 0:40:38.599 understand that there are more urgent issues but I think that some more public 0:40:38.599 --> 0:40:44.079 recognition is needed recognition of of the fact that the United States is 0:40:44.079 --> 0:40:49.319 supporting our uh candidate status within the European Union I know that 0:40:49.319 --> 0:40:57.560 that is the language that the US has with our European Partners but that being repeated by at the highest level 0:40:57.560 --> 0:41:03.400 uh would be uh meaningful for the uh Georgian population the EU has laid out 0:41:03.400 --> 0:41:10.319 a list of requirements for Georgia to become a full member the conditions include tackling corruption and 0:41:10.319 --> 0:41:17.800 lessening the economic and political influence of domestic oligarchs membership is not guaranteed what 0:41:17.800 --> 0:41:25.280 happens to Georgia if the EU denies the bid it would be a big victory for 0:41:25.280 --> 0:41:32.240 Russia a victory vanes refuses to give them 87 years old she says she is 0:41:32.240 --> 0:41:36.880 holding her ground for herself and for 0:41:37.440 --> 0:41:42.839 Georgia that bid may be in further Jeopardy this past February the Georgian 0:41:42.839 --> 0:41:49.839 Parliament appointed a new prime minister an anti-western member of the Russian leading Georgian Dream party in 0:41:49.839 --> 0:41:58.480 May his government passed a foreign agents law which threatens to silence media outlets and NOS inside Georgia and 0:41:58.480 --> 0:42:05.839 just this past week his party proposed legislation that would strip same-sex couples of their rights both moves the 0:42:05.839 --> 0:42:14.920 EU has said could seriously compromise the country's chance for membership and pull Georgia deeper into Russia's 0:42:20.760 --> 0:42:29.119 orbit I'm Scott Pell we'll be back next week with another edition of 60 minutes 0:43:08.990 --> 0:43:15.310 [Music]