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I'm on a journey in search of one
of the biggest stories of our age -

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the unstoppable global rise
of China.

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Oh, look at this.

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On this stage of my journey,
I'll be crossing the Americas,

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from Brazil
to the United States.

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I visit the world's biggest mine,
shipping millions of
tons of iron ore to China.

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What a monster!

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And see how China's incredible
hunger for resources threatens
the world's largest rainforest.

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You can see the devastation
the charcoal process leaves.

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I'll be discovering what it means
for the people who live
in the forest.

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HE SHOUTS GREETING

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And I'll be travelling across
America to see how China's expansion

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is devastating
America's industrial heartlands.

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They've packed up all the machines
on site, and moved them to China.

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So how is the relentless rise
of China upsetting
the balance of world power,

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and what it will mean for us all?

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We see in China things
we used to see in ourselves.

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Can do, get it done, hard work,
sacrifice, own the future.

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Wait a minute - that used to be us.

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Fantastic! Amazing view.

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This is Copacabana here.

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Rio de Janeiro must be one of
the most beautiful cities on Earth.

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But nowadays, Brazil is much more
than an exotic tourist destination.

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It's one of the fastest growing
economies on the planet,
and a crucial player

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in a new international order that
is changing the face of the world.

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I was heading 400km north of Rio
to one of the largest
construction sites in Brazil.

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That is amazing.

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This is what we came to see.

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They call this the highway to China.

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This pier is almost two
miles long, stretching straight out
into the Atlantic Ocean.

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Millions of tons of iron ore,
of soya, of grain

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and millions of barrels
of oil will be loaded
onto ships here, heading east,

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feeding China's seemingly
insatiable appetite for resources.

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The economic boom in China,
more than 10,000 miles away,

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has generated massive demand
for raw materials and food.

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Brazil is packed full of both,
and this vast super-port at Acu will
help increase this growing trade.

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And at its centre
there will be a steel plant built
by Wuhan Iron and Steel,

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a huge Chinese corporation.

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The Acu super-port
is the brainchild of Brazil's
most successful entrepreneur.

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The guy we are about to meet
is worth 27 billion. 27 billion.

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It's going to be interesting.

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Eike Batista is
the world's eighth richest man.

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He made his first fortune
in gold mining, lost it,
and then made himself another.

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Look at the view
of Sugarloaf Mountain.

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It doesn't get much better.

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Hello, hello, everybody.

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Hi, Eike. Thank you very much indeed
for doing this interview.
It's a pleasure.

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It is clear that Eike,
as everyone knows him in Brazil,
is very proud of his super-port.

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You have been to Acu?
Have you seen the size of it?

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It makes the Chinese jealous.

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Eike's companies control
huge reserves of raw materials -
iron ore, natural gas and oil.

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He believes his highway to China

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will help solve
Brazil's historic transport
and infrastructure problems,

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enabling it to export even more.

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All the foreign companies that I've
been talking to in the last 15 years,

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they said to me, "Mr Batista,
I love your country, you know,

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"you have great potential
consumer market,

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"but we don't know how to get in,
and how to get out of your country."

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Now, Acu solves this
for the industries, and it will bring
Brazil's cost dramatically down.

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How important a component of your
vision of Acu, your vision for
Brazil, is the demand from China?

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Well, the Chinese are big consumers
of oil, for sure,

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gigantic consumers of oil, ethanol
and food products.

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Not only are we suppliers
of resources to China,

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China's industries
are starting to move out of China.
Wuhan is an example.

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Chinese car manufacturing.

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Others are coming.

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It's a wonderful
future for the two countries.
And quite a good future for you?

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Because you're already
reckoned to be, are you,
the worlds eighth richest man?

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Are you really worth 27 billion?

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More. More? Yes.

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Listen, Brazil will help me
to go much further.

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And it is not just
billionaires like Eike Batista

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who have benefited from Brazil's
lucrative trade with China.

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The country has been transformed
into an economic powerhouse.

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But all economic revolutions
come at a price.

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I headed north
to the Carajas region

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in the Amazonian state of Para

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to see the impact the boom
is having on Brazil's interior.

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There's only one way to get
a true perspective

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on the scale of China's trade with
Brazil, and that is from the air.

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I love flying
in these little planes.

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Whoa, there we go.

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The Chinese are building cities
faster than any country in history,

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and their manufacturing
industries continue to grow.

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And this industrial expansion
needs steel, and to make steel
you need iron ore, and lots of it.

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We are flying over the biggest
mine complex in the entire world.

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This place produces a quarter
of a billion tones of iron ore
every year.

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A quarter of a billion tones, and by
far its biggest customer is China.

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In fact, last year China bought 60%
of Brazil's entire iron ore output.

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This seemingly endless complex
of iron ore mines is owned
by a Brazilian company, Vale.

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Over the past decade,
Vale's iron ore exports to China
have grown almost fifteen-fold.

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This has become
seriously big business.

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What a monster!

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It literally is as big as a house.
Unbelievable!

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China has its own huge iron ore
deposits, but the demand
has far outstripped the supply.

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And the ore here
is far higher quality.

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And it's this stuff
that makes this mine so valuable.

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It doesn't look like much.
It looks like dirt.

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But this is actually 65% pure iron,
and it's this stuff that the
Chinese want to get their hands on.

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So, Cristiano, how much
iron ore do you produce
from these mines each day?

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Each day, we produce 300,000
tonnes of material, each day.

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And how much
is that ore worth per tonne?

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120.

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120 per tonne?

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300,000 tonnes, so that's what,
36 million worth of ore each day?

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Yes, each day.
Come on, how much profitable it?

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I don't know
if I can talk about this.

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We're...

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50%. You make 50% profit?

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For all the operation
that we have around the world.

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Cristiano is being a bit coy because
Vale in fact made over 6 billion

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in profit last year, so it's
an incredibly profitable company.

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No, just for the third quarter.

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Sorry,
six billion in the last quarter!

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In three months
they made 6 billion. For sure.

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So you're one of the most profitable
companies in the entire world?

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For sure, it's incredible,
it's an incredible mine.

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Increasingly, Chinese companies
are setting up in partnership
with companies here in Brazil.

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In 2007 Chinese state-owned
steel company Minmetals
began a joint venture

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with another Brazilian firm,
Cosipar, to increase dramatically
its production of pig iron -

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lumps of raw iron
that can then be turned into steel.

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Well, that's the final product,
that's the so-called pig iron.

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This stuff,
and it weighs quite a lot.

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All ready to go off to China,
where 70% of it's sold.

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To turn the iron ore into pig iron,
these blast furnaces provided

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by the Chinese
need to reach temperatures
of 1,500 degrees centigrade.

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To do this, companies like Cosipar
need fuel. Lots and lots of fuel.

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And here in the Amazon, there is
a ready source of fuel - the trees.

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And such is the demand
that huge stretches of forest
are illegally cut down,

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and the wood is turned
into charcoal to feed the furnaces.

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One day, there was a forest here.

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Once there was a forest here? Yes.

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Today, we're on a raid with IBAMA,
the Brazilian environment agency,

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hoping to close
down an illegal charcoal operation.

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Roberto is in charge. Roberto, what
can we expect when we get there?

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TRANSLATION: The purpose of the
mission is to locate and identify

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a group of people involved with the
illegal extraction of timber,
to make charcoal.

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What can you see? Smoke.

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You can see smoke?

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Go, go, go.

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Is near.

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Someone running down there.

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There's a charcoal kiln.

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He says everyone's run away.
They obviously got wind
of the fact that we were around.

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You see the tracks
of the motorbikes and the trucks.

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He thinks somebody,
perhaps on a motorbike,

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told them that we were here, and
they've all run off into the forest.

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You can just see the devastation
that this charcoal process leaves.

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Oh, smoky!

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Whoa, there we go.

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So, Roberto, why do
you smash these things up?

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TRANSLATION: It's a way to send
out a message, so the local
community understands

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that this kind of activity,
as well as being illegal,
is unsustainable.

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While sustainable production
is legal, investigations

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have shown
that some charcoal operations
use what is in effect slave labour,

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with entire families,
including children, working
in dirty, miserable conditions.

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HE COUGHS

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Go on, whoa! Yes!

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CHEERING

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Roberto and his team
have been hot on the trail

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of the companies involved
in the illegal charcoal trade.

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Roberto,
what do these documents tell us?

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TRANSLATION: This document shows
that there is a system of laundering
charcoal produced like this.

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These are fraudulent documents.

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It was destined for the company,
Cosipar.

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To Cosipar?

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So this shows that Cosipar has been
buying illegal charcoal, charcoal
produced in places like this?

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TRANSLATION: I am certain.
This document was intercepted
at the Cosipar gates.

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These trucks partly offloaded
at Cosipar, and we were able
to take legal action.

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Roberto believes that Brazilian
pig iron manufacturer Cosipar
has been buying illegal charcoal.

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The company has "previous".

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It's been fined repeatedly
over many years.

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Some of these fines are since
Cosipar went into partnership
with the Chinese.

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So is it still buying charcoal
from illegal camps?

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Where does Cosipar buy its charcoal?

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TRANSLATION: Usually we buy it
from registered farms.

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So you're saying
it's legal charcoal?

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Legal. Legal? Legal.

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We've been to see IBAMA,
and they've given us this list,

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these are all the fines
that have been imposed on Cosipar

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for using illegal charcoal.

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And IBAMA told us that they're
certain that you're still using
illegal charcoal.

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TRANSLATION: No, that is not true.

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On every occasion when
something like this happens,
we have always defended our case.

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Hold on a second, why is IBAMA
fining you again and again
and again?

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Look at all these fines.

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TRANSLATION: The truth is, we are
always looking for sustainability,

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even with our own production of
timber to be used in the process.

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There were cases in the past,
but we are working to put this right

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day after day until we become
100% sustainable.

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All of these fines are a matter
of public record.

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Do your Chinese partners have a
problem with the way in which
you're buying illegal charcoal?

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Do the Chinese have a problem
with this?

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TRANSLATION: We've never had a
problem. They don't have a problem?

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TRANSLATION: No. As I've said, we are
always trying to ease that situation,

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and are looking for ways
to make this situation legal.

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OK, sorry enough, for me.
Can't we finish the interview?

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00:17:31,520 --> 00:17:32,640
No, I finish.

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00:17:32,640 --> 00:17:38,840
But surely the Chinese buyers have a
responsibility for making sure that
your production is clean, is legal?

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Cosipar has previously denied any
wrongdoing over its charcoal supply.

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It says its own trees
will sustainably supply all
its charcoal needs by 2015.

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The destruction of the Amazonian
rainforest has been going on
for decades.

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Paulo Adario is the head
of Greenpeace Amazon,

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who is charting the ongoing extent
of deforestation here.

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What's extraordinary looking
down from the air, is just how
degraded the land is.

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There's a huge charcoal plant
over there.

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Probably 100 kilns down there
just smoking away.

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Burning up the forest.

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So what's driving the deforestation
in this part of the Amazon?

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Here in the Amazon, the indigenous
people have borne the brunt

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of the world's hunger
for natural resources,
increasingly driven by China.

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Wow, the canopy's really thick here.

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This is one of the last areas of
true rainforest left in this whole
region of Brazil,

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and there's a tribe living here
called the Awa.

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Their land's threatened by loggers
and hunters who are encroaching
on it,

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and they've invited us here
to see what's happening to them.

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It was a unique chance to find out
how the indigenous peoples of Brazil

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are being affected by 21st-century
globalisation.

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Katu! Katu!

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Katu!

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Katu means "hello", apparently.
Katu.

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The Awa are one of the last
nomadic peoples of the Amazon.

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Their land is legally protected
but still the loggers

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bulldoze the forest and destroy
their hunting grounds.

225
00:20:39,840 --> 00:20:43,440
Emooka. Emooka, emooka.
That means "I'm happy".

226
00:20:43,440 --> 00:20:46,480
Here with the Awa.

227
00:20:48,760 --> 00:20:50,640
Thank you.

228
00:20:51,600 --> 00:20:56,680
Some Awa groups have still not
been contacted, but this group
of families has been settled

229
00:20:56,680 --> 00:21:01,160
under the protection of FUNAI,
the Brazilian government's
Indian Affairs Department.

230
00:21:04,120 --> 00:21:06,520
Wow, the village. Katu.

231
00:21:12,280 --> 00:21:16,240
The Awa were keen to show me their
forest and to take me on a hunt.

232
00:21:16,240 --> 00:21:19,840
I'm not going to go like this.
I'm not going to dress like this.

233
00:21:19,840 --> 00:21:22,040
I'm not going to dress
like that, no!

234
00:21:22,040 --> 00:21:24,400
He wants me to dress like that.

235
00:21:24,400 --> 00:21:29,160
I don't know what he's done but
it doesn't look very comfortable.
It's OK like this?

236
00:21:36,360 --> 00:21:41,120
The Awa still live almost
entirely from what they can hunt
and gather from the forest.

237
00:21:41,120 --> 00:21:45,280
Unfortunately for the Awa, the trees
that feed them and the game

238
00:21:45,280 --> 00:21:49,160
they hunt are also highly prized
for their hard woods.

239
00:21:49,160 --> 00:21:51,760
That's really spiky! Is it to eat?

240
00:21:59,160 --> 00:22:01,640
That's nice, that's sweet.

241
00:22:05,160 --> 00:22:10,400
China is the world's leading
destination for illegal timber.

242
00:22:10,400 --> 00:22:13,120
While it's easy to blame
the Chinese,

243
00:22:13,120 --> 00:22:19,280
many of the things they manufacture
with Brazilian timber are exported
to us in the West.

244
00:22:19,280 --> 00:22:26,960
Wherever the wood ends up, the Awa
have now lost half their territory
and their nomadic way of life.

245
00:22:40,800 --> 00:22:47,600
The Awa hunters took to me to see
a Jatoba tree, a tropical hardwood
which is in great demand in China.

246
00:22:47,600 --> 00:22:50,760
The Awa regard them as precious too.

247
00:23:20,200 --> 00:23:24,600
The reason Jatoba is so popular
is this is a really beautiful
hardwood,

248
00:23:24,600 --> 00:23:30,000
and it's exported to China,
where they make it into
floors and furniture,

249
00:23:30,000 --> 00:23:34,920
quite a lot of which is then sold on
to America and to Europe.

250
00:23:34,920 --> 00:23:36,560
That's why the loggers want it.

251
00:23:39,840 --> 00:23:43,680
I was amazed and humbled by how
welcoming the Awa people were to me.

252
00:23:43,680 --> 00:23:48,320
After all, I'm one of the
non-Indian enemies they spoke of.

253
00:23:49,440 --> 00:23:53,960
And I think I must have lost some of
my inhibitions when it was time
to cool off.

254
00:24:01,440 --> 00:24:03,960
I wasn't expecting what
happened next, though.

255
00:24:06,480 --> 00:24:08,240
He's going to tie me up.

256
00:24:09,880 --> 00:24:14,520
They wanted to initiate me
with their traditional adornment.

257
00:24:14,520 --> 00:24:17,120
Argh, leave me alone!

258
00:24:19,680 --> 00:24:21,200
They got me in the end.

259
00:24:23,760 --> 00:24:26,840
You don't want to see it,
you don't want to see it.

260
00:24:40,080 --> 00:24:42,760
The Awa people seem to inhabit
a different planet

261
00:24:42,760 --> 00:24:47,040
to those who live in Brazil's
mega-cities to the south.

262
00:24:47,040 --> 00:24:52,080
But increasingly, all the people of
the world are locked together
through trade.

263
00:24:52,080 --> 00:24:58,240
And all our lives are being
changed by economic might of the
emerging super power to the east.

264
00:25:01,760 --> 00:25:03,760
This is a Chinese shop.

265
00:25:05,080 --> 00:25:08,160
Made in China. Made in China.
You know, made in China.

266
00:25:08,160 --> 00:25:10,200
Yeah, made in China.

267
00:25:13,000 --> 00:25:15,960
What about this one?
Another Chinese shop.

268
00:25:15,960 --> 00:25:18,400
Yes. So there are quite a few
Chinese shops?

269
00:25:18,400 --> 00:25:19,720
Si, si.

270
00:25:19,720 --> 00:25:24,840
A Chinese businessman, Kuan Ta Shun,
took me to Rio's main street market.

271
00:25:24,840 --> 00:25:28,000
Many of the shops are now owned
by Chinese people, but even more

272
00:25:28,000 --> 00:25:31,920
striking is just how many of the
things here are made in China.

273
00:25:31,920 --> 00:25:38,840
TRANSLATION: A lot of products,
in the last ten years, have
been imported from China.

274
00:25:38,840 --> 00:25:41,560
They come from China?
They come from China.

275
00:25:41,560 --> 00:25:43,800
All of these products
would be Chinese?

276
00:25:43,800 --> 00:25:49,200
All of the products you can see
there, all of these products
come from China.

277
00:25:49,200 --> 00:25:54,200
Clothes, fabrics, toys,
domestic utensils.

278
00:25:55,840 --> 00:25:57,520
Why is it increasing so quickly?

279
00:25:59,280 --> 00:26:06,560
TRANSLATION: It's due to the price.
The Chinese goods are much cheaper.

280
00:26:08,080 --> 00:26:10,360
So it's easier for them to compete.

281
00:26:15,200 --> 00:26:17,520
It's the same story
across the world.

282
00:26:17,520 --> 00:26:20,480
Cheap Chinese manufacturing
has kept prices low.

283
00:26:20,480 --> 00:26:24,640
It's driven much of the economic
growth we've enjoyed in the last
couple of decades,

284
00:26:24,640 --> 00:26:27,440
but not everyone benefits.

285
00:26:27,440 --> 00:26:33,600
China's explosive growth is clearly
creating bonanzas for some parts
of the Brazilian economy,

286
00:26:33,600 --> 00:26:40,560
but for others,
it's becoming a burden, including
for one of Brazil's most, erm,

287
00:26:40,560 --> 00:26:42,840
emblematic products.

288
00:26:53,200 --> 00:27:00,040
In the spiritual home of the bikini,
cheap Chinese imports have
flooded the market.

289
00:27:02,080 --> 00:27:03,800
Tough research!

290
00:27:04,920 --> 00:27:08,160
They're made here, in Brazil?
Ah, OK, Brasilero. Si.

291
00:27:08,160 --> 00:27:11,800
Let's buy a couple of them.

292
00:27:11,800 --> 00:27:14,960
I'm not a great judge
of ladies' swimwear.

293
00:27:14,960 --> 00:27:16,400
Looks very small to me.

294
00:27:16,400 --> 00:27:19,040
But maybe that's they way
they wear them in Brazil.

295
00:27:26,320 --> 00:27:31,360
I took the cheap bikinis I bought
in the market to compare them
with some quality made ones.

296
00:27:36,560 --> 00:27:38,920
The bikini factory, eh?
Thank you very much.

297
00:27:40,880 --> 00:27:42,960
Hello, ladies. Hello.

298
00:27:44,320 --> 00:27:47,560
How would the cheap bikinis
I'd bought stand up to the scrutiny

299
00:27:47,560 --> 00:27:51,760
of an expert, and were they
the genuine article?

300
00:27:51,760 --> 00:27:54,560
A lot of them say,
look, "Made in Brazil".

301
00:27:54,560 --> 00:27:58,080
So are these not Brazilian bikinis?

302
00:27:58,080 --> 00:27:59,840
No, it's not a Brazilian bikini.

303
00:27:59,840 --> 00:28:01,640
No way a bikini Brazilian.

304
00:28:01,640 --> 00:28:04,000
No? How can you tell?

305
00:28:04,000 --> 00:28:07,800
TRANSLATION: It's different,
the fabric, the cut.

306
00:28:07,800 --> 00:28:11,840
Really? So where do these
come from, would you think?

307
00:28:11,840 --> 00:28:14,840
I'd say from China.

308
00:28:14,840 --> 00:28:18,920
The finishing is bad, the type
of Lycra and the colours.

309
00:28:18,920 --> 00:28:22,240
It's not the authentic
Brazilian bikini.

310
00:28:25,600 --> 00:28:31,760
The Enseada Da Praia bikini business
has five shops and employs
49 people.

311
00:28:31,760 --> 00:28:37,080
It used to have a big
export business too, but recently
the company has struggled.

312
00:28:37,080 --> 00:28:41,040
So how much has the Chinese
competition affected your business?

313
00:28:41,040 --> 00:28:45,640
TRANSLATION: In four months of the
year, I used to produce 20,000
pieces.

314
00:28:45,640 --> 00:28:48,120
Now I can only make 10,000.

315
00:28:48,120 --> 00:28:50,680
So it's halved? Si.

316
00:28:50,680 --> 00:28:54,920
I used to export a lot.

317
00:28:54,920 --> 00:29:00,400
And we had dreams
for expanding our distribution
into the Americas and Europe.

318
00:29:03,480 --> 00:29:10,280
But demand went down because of
the low prices of Chinese products
and I had to abandon that dream.

319
00:29:13,400 --> 00:29:16,840
I think the whole world
should be worried by this threat

320
00:29:16,840 --> 00:29:21,200
because every country has its
own economy, its own specialties.

321
00:29:21,200 --> 00:29:27,680
If China starts producing the
typical products from every country
then everybody will be affected.

322
00:29:27,680 --> 00:29:31,960
I think it's very dangerous.

323
00:29:31,960 --> 00:29:35,080
Competition from China
clearly makes it difficult

324
00:29:35,080 --> 00:29:39,000
for Brazilian manufacturers
to compete on price alone.

325
00:29:39,000 --> 00:29:41,000
But on the products themselves,

326
00:29:41,000 --> 00:29:44,760
can the Brazilian consumer
really tell the difference?

327
00:29:48,840 --> 00:29:52,360
It was time to take my research
into the field...

328
00:29:54,560 --> 00:29:58,440
..Armed with both Chinese
and Brazilian bikinis.

329
00:30:04,080 --> 00:30:08,120
So we've come down to the beach
to do a test,

330
00:30:08,120 --> 00:30:11,840
to see whether the Chinese bikinis

331
00:30:11,840 --> 00:30:14,120
live up to
the high Brazilian standards,

332
00:30:14,120 --> 00:30:15,560
so let's find out.

333
00:30:18,360 --> 00:30:21,800
Hiya, we're doing
a little test for the BBC

334
00:30:21,800 --> 00:30:23,600
and we've bought some bikinis.

335
00:30:23,600 --> 00:30:26,840
Some of these bikinis are Brazilian
and some come from China.

336
00:30:26,840 --> 00:30:28,640
Which are the good ones?
OK, yeah.

337
00:30:28,640 --> 00:30:30,200
Which ones do you think are...

338
00:30:30,200 --> 00:30:31,720
They would be... No. 

339
00:30:31,720 --> 00:30:34,440
Sorry?
No, the yellow one is the better.

340
00:30:34,440 --> 00:30:37,840
This is very old school,
this kind of, you know...

341
00:30:37,840 --> 00:30:39,400
they call them curtains.

342
00:30:39,400 --> 00:30:43,120
Oh, the sort of... Here on the top.
The ruching, I think we call it.

343
00:30:43,120 --> 00:30:46,080
So that's a bit small, isn't it?
Yeah, that's really tiny.

344
00:30:46,080 --> 00:30:47,200
Oh, my God.

345
00:30:47,200 --> 00:30:49,680
These, I'd rather wear
with a boyfriend

346
00:30:49,680 --> 00:30:52,440
or a couple of boyfriends
in a motel room,

347
00:30:52,440 --> 00:30:55,240
if you know what I'm talking about.

348
00:30:55,240 --> 00:30:58,720
Cos here in Brazil you have
motel rooms, right, you pay by hour.

349
00:30:58,720 --> 00:31:01,080
OK, all right! No more details.

350
00:31:01,080 --> 00:31:02,880
OK, sorry. And what about this one?

351
00:31:02,880 --> 00:31:06,600
Well, this is a Chinese one
and this is a Brazilian one. I know.

352
00:31:06,600 --> 00:31:09,720
So you chose one of the Chinese
and one of the Brazilian ones.

353
00:31:09,720 --> 00:31:12,200
Maybe I'm going to try
this one in a bigger size.

354
00:31:12,200 --> 00:31:14,600
You can try it now.
Will you try that on for us?

355
00:31:14,600 --> 00:31:17,880
Where do you want me to try? Here?
She's got some towels. Sure.

356
00:31:17,880 --> 00:31:20,480
Will you try one of
our Chinese ones? Try this one.

357
00:31:20,480 --> 00:31:22,720
I'll try this one.
The flowers, yeah. Yeah.

358
00:31:22,720 --> 00:31:26,480
What, now? Yeah, now.

359
00:31:35,920 --> 00:31:40,200
'I thought that the real Brazilian
bikinis were obviously better made.

360
00:31:41,760 --> 00:31:43,000
'But for some,

361
00:31:43,000 --> 00:31:47,440
'those cheap Chinese ones seem
to hit the spot just as well.'

362
00:31:47,440 --> 00:31:50,200
No, that's excellent. Very good.

363
00:31:50,200 --> 00:31:53,320
Buy Chinese bikinis!
They're the best.

364
00:31:53,320 --> 00:31:56,720
I'm Brazilian and I approved. Kiss.

365
00:31:59,840 --> 00:32:01,640
It's not just bikinis.

366
00:32:01,640 --> 00:32:03,800
Whether it's laptops,
cars or fridges,

367
00:32:03,800 --> 00:32:06,000
the dilemma is the same.

368
00:32:06,000 --> 00:32:10,320
We rely on cheap Chinese goods
to improve our standards of living.

369
00:32:10,320 --> 00:32:13,560
But at the same time, it threatens
our own industries and jobs,

370
00:32:13,560 --> 00:32:16,400
which is why
so many people are worried

371
00:32:16,400 --> 00:32:18,920
by the growing role of China.

372
00:32:18,920 --> 00:32:23,040
I'm about to meet a linchpin of the
Chinese community here in Brazil.

373
00:32:23,040 --> 00:32:26,960
This guy is behind a lot of the
big deals between China and Brazil.

374
00:32:30,280 --> 00:32:33,840
Charles? Hello, hi, Charles. Hey.
Thank you very much for having us.

375
00:32:33,840 --> 00:32:36,680
How are you? Yeah, very well indeed,
thank you very much.

376
00:32:36,680 --> 00:32:39,640
Be careful with the stairs.
This is a lovely place. Thank you.

377
00:32:39,640 --> 00:32:42,320
'Charles Tang came to Brazil
in the 1970s,'

378
00:32:42,320 --> 00:32:45,480
and established the
China-Brazil Chamber of Commerce.

379
00:32:45,480 --> 00:32:48,920
He has extraordinary
connections in both countries.

380
00:32:48,920 --> 00:32:53,480
So how significant a trading partner
is China for Brazil?

381
00:32:53,480 --> 00:32:56,840
China has, in abundance,
what Brazil needs.

382
00:32:56,840 --> 00:33:02,800
Brazil needs capital investments to
grow its economy and to create jobs.

383
00:33:02,800 --> 00:33:06,120
And Brazil has, in abundance,
what China needs.

384
00:33:06,120 --> 00:33:09,520
Which is iron ore,
other mineral resources,

385
00:33:09,520 --> 00:33:13,280
petroleum now, with the pre-salt,

386
00:33:13,280 --> 00:33:16,240
and, of course, soya beans

387
00:33:16,240 --> 00:33:17,760
and agricultural products.

388
00:33:17,760 --> 00:33:22,720
People see the rise of China,
the increasing strength of China,
and they're frightened.

389
00:33:22,720 --> 00:33:24,480
They think, "The Chinese are coming.

390
00:33:24,480 --> 00:33:28,120
"The Chinese are coming
to take our resources,
to exploit our economies."

391
00:33:28,120 --> 00:33:30,000
Should they be frightened of China?

392
00:33:30,000 --> 00:33:34,520
You know, China is not trying
to conquer any territory.

393
00:33:34,520 --> 00:33:38,320
China is not really trying
to dominate any country.

394
00:33:38,320 --> 00:33:40,240
China wants to do business.

395
00:33:40,240 --> 00:33:44,120
They just want to buy, sell, invest.

396
00:33:44,120 --> 00:33:46,400
And China is not
colonising any country...

397
00:33:46,400 --> 00:33:49,720
You're saying China trades with
Africa and Brazil as equals?

398
00:33:49,720 --> 00:33:51,840
China is not
taking the resources away

399
00:33:51,840 --> 00:33:55,080
without doing business
and paying for it.

400
00:33:55,080 --> 00:33:57,080
That is quite different, I think,

401
00:33:57,080 --> 00:34:00,920
from my recollection
of British imperial history.

402
00:34:09,680 --> 00:34:12,200
The Chinese may not
be building an empire,

403
00:34:12,200 --> 00:34:16,320
but they are fast emerging
as the next great superpower,

404
00:34:16,320 --> 00:34:19,360
reshaping the world order.

405
00:34:23,600 --> 00:34:26,880
Nowhere is this being felt
more keenly than in America.

406
00:34:26,880 --> 00:34:29,200
I headed for California.

407
00:34:37,440 --> 00:34:40,800
Look at that, Los Angeles,
The City Of Angels.

408
00:34:43,480 --> 00:34:47,960
China now threatens America's
dominant position in the world.

409
00:34:47,960 --> 00:34:49,000
At current rates,

410
00:34:49,000 --> 00:34:53,920
the Chinese economy will overtake
America's within the next ten years.

411
00:35:00,920 --> 00:35:05,640
Hacienda Heights is an
unremarkable Los Angeles suburb.

412
00:35:05,640 --> 00:35:07,640
Here, they've been doing their best

413
00:35:07,640 --> 00:35:10,320
to prepare the next generation
of Americans

414
00:35:10,320 --> 00:35:12,680
for the challenge of China.

415
00:35:15,520 --> 00:35:19,000
Hi, sorry I'm late. Can I come in?

416
00:35:19,000 --> 00:35:20,560
Yes, please. Welcome!

417
00:35:20,560 --> 00:35:23,560
Thank you very much.
Hello, everybody! CHILDREN: Hello.

418
00:35:23,560 --> 00:35:24,880
My name's Justin.

419
00:35:27,880 --> 00:35:30,120
'Confucius Classrooms,
as they're known,

420
00:35:30,120 --> 00:35:33,040
'are teaching children
across America Mandarin,

421
00:35:33,040 --> 00:35:36,040
'and about Chinese culture.'

422
00:35:36,040 --> 00:35:38,160
HE SPEAKS MANDARIN

423
00:35:38,160 --> 00:35:40,040
Give him a hand! Excellent.

424
00:35:41,960 --> 00:35:45,960
And that was, "Yesterday is Monday."
"..Was Monday."

425
00:35:48,720 --> 00:35:50,040
"Tomorrow is Monday."

426
00:35:50,040 --> 00:35:51,400
Tomorrow is Monday.

427
00:35:52,400 --> 00:35:54,440
'Here at Cedarlane Middle School,

428
00:35:54,440 --> 00:35:58,400
'the lessons have been made
compulsory for 11 to 13-year-olds.

429
00:35:58,400 --> 00:36:01,120
'Jay Chen is a board member
for the school district

430
00:36:01,120 --> 00:36:04,600
'that took the decision
to initiate the classes.'

431
00:36:04,600 --> 00:36:08,320
Jay, why do you think it's important
for children to learn Chinese?

432
00:36:08,320 --> 00:36:12,240
It's absolutely essential
that American students
start learning Chinese,

433
00:36:12,240 --> 00:36:13,680
especially at younger ages

434
00:36:13,680 --> 00:36:16,680
because right now,
China's our largest trading partner.

435
00:36:16,680 --> 00:36:20,240
Chinese itself is the most widely-
spoken first language in the world

436
00:36:20,240 --> 00:36:23,200
and China's now the second
largest economy in the world.

437
00:36:23,200 --> 00:36:25,600
So if we want our students
to be able to compete

438
00:36:25,600 --> 00:36:28,400
in a world in which China's
going to be a much larger player,

439
00:36:28,400 --> 00:36:31,080
they need to start learning Chinese
at an earlier age.

440
00:36:42,840 --> 00:36:46,360
That means you're an excellent
student. Give Justin a hand!

441
00:36:47,360 --> 00:36:50,600
You earn one ticket that says,
"You are an excellent student."

442
00:36:50,600 --> 00:36:52,000
Oh, thank you. OK.

443
00:36:54,760 --> 00:36:57,080
These classes
may seem harmless enough,

444
00:36:57,080 --> 00:37:01,240
but they sparked controversy
and outrage here in Hacienda Heights

445
00:37:01,240 --> 00:37:04,040
when it was announced
that funding and textbooks

446
00:37:04,040 --> 00:37:08,000
would be provided by
the Chinese Communist government.

447
00:37:22,040 --> 00:37:27,760
There's been a vocal protest
from people who believe
Beijing is using the classes

448
00:37:27,760 --> 00:37:30,120
to smuggle pro-China propaganda

449
00:37:30,120 --> 00:37:35,400
into American classrooms. I'm
going to meet the campaigners now.

450
00:37:35,400 --> 00:37:39,760
Why have you been opposed
to the, erm...

451
00:37:39,760 --> 00:37:42,320
the Chinese lessons
here at Cedarlane?

452
00:37:42,320 --> 00:37:44,520
Not opposed to them
teaching Chinese,

453
00:37:44,520 --> 00:37:49,520
we're opposed to them wanting to use
communist Chinese teachers in here.

454
00:37:49,520 --> 00:37:51,680
They're using
communist Chinese books.

455
00:37:51,680 --> 00:37:54,640
I'm against that completely -
use books made in America.

456
00:37:54,640 --> 00:37:57,960
I spent 30 years in a marine corps
fighting communism,

457
00:37:57,960 --> 00:38:01,600
then shot at communists,
they shot at me and everything else.

458
00:38:01,600 --> 00:38:04,040
My last breath -
I'll fight communists.

459
00:38:04,040 --> 00:38:06,200
We happen to love our country

460
00:38:06,200 --> 00:38:08,360
and we don't want it infiltrated

461
00:38:08,360 --> 00:38:12,040
by insidious methods
of misinformation

462
00:38:12,040 --> 00:38:14,000
coming into our schools.

463
00:38:14,000 --> 00:38:17,920
Starting with youngsters -
that's very insidious and wrong.

464
00:38:17,920 --> 00:38:21,560
'Among the protestors was
a Chinese immigrant, Kai Chen,

465
00:38:21,560 --> 00:38:26,760
'who's a long-time campaigner
against China's one-party state.'

466
00:38:26,760 --> 00:38:29,040
Kai, why are you out here,
why are you upset?

467
00:38:29,040 --> 00:38:31,080
Well, you know, I'm from China.

468
00:38:31,080 --> 00:38:32,960
You know, I came here in 1981

469
00:38:32,960 --> 00:38:36,120
so, I know China
through and through.

470
00:38:36,120 --> 00:38:38,920
They don't even mention
Tiananmen Square,

471
00:38:38,920 --> 00:38:41,080
you know, in their own country.

472
00:38:41,080 --> 00:38:45,880
They don't mention, you know,
Great Leap Forward and Great Famine.

473
00:38:45,880 --> 00:38:49,240
How tens of millions died by Mao

474
00:38:49,240 --> 00:38:52,120
and that's all erased
from Chinese textbook.

475
00:38:52,120 --> 00:38:55,000
And if you don't explain
that to the students,

476
00:38:55,000 --> 00:38:58,240
that's a tremendous problem to me.

477
00:38:58,240 --> 00:38:59,520
It's not what you teach,

478
00:38:59,520 --> 00:39:03,640
it's what you don't teach
that matters tremendously.

479
00:39:03,640 --> 00:39:05,000
That's my point.

480
00:39:09,120 --> 00:39:11,720
'I thought it might
be worth inviting Jay

481
00:39:11,720 --> 00:39:14,920
'to defend the merits of
the Confucius Classroom scheme.'

482
00:39:14,920 --> 00:39:17,840
Jay, do you want to come
and talk to these people?

483
00:39:17,840 --> 00:39:22,400
I think you're familiar with
everybody here, aren't you? 
Yes, we've all met before.

484
00:39:22,400 --> 00:39:23,600
Hi, how are you?

485
00:39:25,160 --> 00:39:28,120
I'm all for learning Chinese,
don't get me wrong,

486
00:39:28,120 --> 00:39:30,960
but I'm against having Chinese books
in that classroom

487
00:39:30,960 --> 00:39:33,080
and also the word, Confucius.

488
00:39:33,080 --> 00:39:37,560
I see nothing wrong with
having a programme that promotes
Chinese language and learning.

489
00:39:37,560 --> 00:39:44,360
You work for us, we're taxpayers.
There are over 60 Confucius
Classrooms in the United States.

490
00:39:44,360 --> 00:39:46,240
You operate under this premise

491
00:39:46,240 --> 00:39:50,360
that China is just another
normal country like America.

492
00:39:50,360 --> 00:39:51,600
China is not.

493
00:39:51,600 --> 00:39:54,920
China is not! China is
a party state. It's not a country?

494
00:39:54,920 --> 00:39:56,640
China is not even a government.

495
00:39:56,640 --> 00:39:59,680
China's government
serves the party's interest,

496
00:39:59,680 --> 00:40:01,280
do you understand that?

497
00:40:01,280 --> 00:40:03,080
I don't think we're in the business

498
00:40:03,080 --> 00:40:06,600
of teaching children
about countries being evil

499
00:40:06,600 --> 00:40:09,360
and teaching children
to be against certain things.

500
00:40:09,360 --> 00:40:11,080
That's not what we here are about.

501
00:40:11,080 --> 00:40:14,320
We're about educating students
so they can make up their own mind.

502
00:40:14,320 --> 00:40:17,720
Why can't you do away with
the word Confucius or Hanban?

503
00:40:17,720 --> 00:40:22,280
There's nothing wrong with
the word Confucius. What is
wrong with the word Confucius?

504
00:40:22,280 --> 00:40:26,160
Because it comes from China
and you got that money from China

505
00:40:26,160 --> 00:40:27,880
and you've got to use that word.

506
00:40:27,880 --> 00:40:31,720
Most things that we purchase
in America come from China.
It's a shame too.

507
00:40:31,720 --> 00:40:36,680
Most of it's junk and poison too.

508
00:40:38,840 --> 00:40:43,360
It's clear that this debate is not
going to be resolved any time soon.

509
00:40:43,360 --> 00:40:44,800
As a result of the protests,

510
00:40:44,800 --> 00:40:48,560
the school has decided not
to accept the funding from China,

511
00:40:48,560 --> 00:40:50,800
but they still use the textbooks.

512
00:40:53,680 --> 00:40:57,360
The disagreement here reflects
a much wider discomfort about China

513
00:40:57,360 --> 00:40:59,880
and the effect
it's having on America.

514
00:41:00,880 --> 00:41:03,160
That discomfort
is turning to despair

515
00:41:03,160 --> 00:41:05,520
in America's industrial heartlands.

516
00:41:08,640 --> 00:41:11,520
# They built a blast furnace

517
00:41:11,520 --> 00:41:15,400
# Here along the shore

518
00:41:15,400 --> 00:41:18,760
# And they made the cannonballs

519
00:41:18,760 --> 00:41:21,480
# That helped the Union win the war

520
00:41:21,480 --> 00:41:24,280
# Here in Youngstown

521
00:41:24,280 --> 00:41:27,000
# Here in Youngstown... #

522
00:41:27,000 --> 00:41:31,280
Youngstown, Ohio, was the birthplace
of the American steel industry.

523
00:41:31,280 --> 00:41:34,360
Bruce Springsteen has described
the city's decline.

524
00:41:37,120 --> 00:41:41,440
# ..Sweet Jenny, I'm sinkin' down

525
00:41:41,440 --> 00:41:45,280
# Here, darlin', in Youngstown... #

526
00:41:45,280 --> 00:41:47,440
George and Sheila Calko,

527
00:41:47,440 --> 00:41:51,440
showed me what used to be known
as Steel Valley.

528
00:41:52,560 --> 00:41:57,240
This is the birthplace of steel.
It started over there and ran all
the way through these buildings.

529
00:41:57,240 --> 00:42:01,000
Right down the valley?
It was about 37 miles. Wow.

530
00:42:01,000 --> 00:42:04,680
'Four generations of George's family
worked steel here,

531
00:42:04,680 --> 00:42:08,960
'he's one of the few local people
to still have a job in the industry.

532
00:42:08,960 --> 00:42:12,080
'He knows the city's
glorious history well.'

533
00:42:12,080 --> 00:42:15,120
Steel from here went into
the Empire State Building.

534
00:42:15,120 --> 00:42:18,200
This is where they made steel
for tanks in World War II.

535
00:42:18,200 --> 00:42:20,560
This is where they made it.

536
00:42:27,120 --> 00:42:29,800
The decline of the steel industry
here in America,

537
00:42:29,800 --> 00:42:34,000
has been mirrored by the growth
of China's steel industry.

538
00:42:38,520 --> 00:42:43,240
China now accounts for almost half
of the world's steel production,

539
00:42:43,240 --> 00:42:47,920
while in 2009,
American output fell by a third.

540
00:42:49,720 --> 00:42:53,320
The steel industry
was the lifeblood of this community.

541
00:42:58,640 --> 00:43:01,520
When one industry leaves
in a one industry town...

542
00:43:01,520 --> 00:43:03,320
you've got nothing to fall back on.

543
00:43:07,400 --> 00:43:10,040
We're seeing bars
going up on windows,

544
00:43:10,040 --> 00:43:13,680
we're seeing people afraid
to get out into their neighbourhoods,

545
00:43:13,680 --> 00:43:15,200
to be a part of the community.

546
00:43:15,200 --> 00:43:19,360
We see increase in crime,
increase in violence.

547
00:43:19,360 --> 00:43:23,600
You see trouble with drugs
and alcohol addictions,

548
00:43:30,000 --> 00:43:35,120
'George and Shelia took me
to a closed-down steel works.'

549
00:43:37,040 --> 00:43:39,760
This is over 100 years old.

550
00:43:39,760 --> 00:43:43,920
It's been shut down
for about two and a half years.

551
00:43:44,920 --> 00:43:49,440
This is going on all over
America's industrial heartland,

552
00:43:49,440 --> 00:43:52,800
places like this are going
out of business left and right.

553
00:43:52,800 --> 00:43:56,280
They've packed up all the machines
and they've moved them to China.

554
00:43:57,280 --> 00:44:00,320
With its cheap labour
and state support,

555
00:44:00,320 --> 00:44:03,960
China's steel industry
can produce steel very cheaply.

556
00:44:03,960 --> 00:44:08,000
That's enticed increasing numbers
of American manufacturers

557
00:44:08,000 --> 00:44:10,960
who use steel in everything
from cars to computers,

558
00:44:10,960 --> 00:44:14,400
to move their production to China.

559
00:44:20,080 --> 00:44:22,800
What we're losing is
much more than just a product

560
00:44:22,800 --> 00:44:24,280
that can be found in a store.

561
00:44:24,280 --> 00:44:28,240
We're losing a culture
and a way of life

562
00:44:28,240 --> 00:44:33,520
and that's really tough to deal with,

563
00:44:33,520 --> 00:44:36,080
that's the true heartbreak.

564
00:44:37,960 --> 00:44:39,760
When I look inside that loading bay

565
00:44:39,760 --> 00:44:42,640
and I see water that's been
sitting there long enough

566
00:44:42,640 --> 00:44:44,560
to let algae grow in it,

567
00:44:44,560 --> 00:44:47,640
it's hard to deal with
and hard to see

568
00:44:47,640 --> 00:44:50,840
and hard to be hopeful
for the future.

569
00:44:56,360 --> 00:44:58,640
Sheila, how do you feel
looking at this place?

570
00:45:02,320 --> 00:45:04,920
You just think about all the people

571
00:45:04,920 --> 00:45:08,440
that can't provide
for their families any more,

572
00:45:08,440 --> 00:45:11,680
people, you know,
get addicted to drugs

573
00:45:11,680 --> 00:45:15,080
and that's what I think about,
and its hard.

574
00:45:15,080 --> 00:45:17,560
You know those people.

575
00:45:17,560 --> 00:45:19,520
I think it could have been saved.

576
00:45:19,520 --> 00:45:23,080
I think if we would have valued
people over profit, I think that...

577
00:45:24,600 --> 00:45:26,200
..it could have been saved.

578
00:45:34,320 --> 00:45:37,760
But there are a few steel companies
that are thriving here.

579
00:45:48,280 --> 00:45:52,520
In nearby Brookfield, a new
10 million steel pipe plant

580
00:45:52,520 --> 00:45:57,560
has been doing good business, having
found a way to defend itself

581
00:45:57,560 --> 00:46:01,080
against the fierce
competition from China.

582
00:46:01,080 --> 00:46:03,040
So it's a bit like a nut and a bolt,

583
00:46:03,040 --> 00:46:06,680
you're just creating two
ends that you can screw together.

584
00:46:10,480 --> 00:46:13,040
The owners of this plant
were part of a campaign

585
00:46:13,040 --> 00:46:15,880
to prove that the Chinese
were selling steel pipes

586
00:46:15,880 --> 00:46:17,880
below the cost of production

587
00:46:17,880 --> 00:46:21,680
and unfairly undercutting
American manufacturers.

588
00:46:24,000 --> 00:46:28,480
As a result, the US slapped
a multibillion dollar tariff,

589
00:46:28,480 --> 00:46:33,040
or tax, on all seamless steel
pipes imported from China.

590
00:46:33,040 --> 00:46:36,760
It's transformed the
prospects for the company,

591
00:46:36,760 --> 00:46:39,360
and the 56 workers it now employs.

592
00:46:39,360 --> 00:46:45,000
Machinist, Ken Boyles, says this
is the best job he's had for years.

593
00:46:45,000 --> 00:46:48,840
How has China affected your
working life? It's ruined it.

594
00:46:48,840 --> 00:46:51,040
I lost my jobs because of it.

595
00:46:51,040 --> 00:46:53,040
Because of China? Because of China.

596
00:46:53,040 --> 00:46:58,960
I had trouble finding employment
for long periods of time.

597
00:46:58,960 --> 00:47:01,360
I mean, my family and I struggled,

598
00:47:01,360 --> 00:47:04,040
we had trouble putting
food on the table at times.

599
00:47:04,040 --> 00:47:07,280
So how has the job here
changed things for you?

600
00:47:07,280 --> 00:47:09,600
Oh, it's changed my life altogether.

601
00:47:09,600 --> 00:47:13,000
I mean I'm working,
we're making a good product,

602
00:47:13,000 --> 00:47:14,840
I'm making a decent wage,

603
00:47:14,840 --> 00:47:17,960
and it's so much better.

604
00:47:17,960 --> 00:47:21,520
It's been ten years since
I've had anything like this.

605
00:47:21,520 --> 00:47:26,000
China has called the tariff
"abusive protectionism",

606
00:47:26,000 --> 00:47:29,160
and warned that it
will take action.

607
00:47:29,160 --> 00:47:32,560
Despite that threat,
there's growing pressure in America

608
00:47:32,560 --> 00:47:34,560
for further action against China.

609
00:47:34,560 --> 00:47:40,480
My next destination is America's
capital city, Washington D. C.

610
00:47:49,400 --> 00:47:51,320
Wow. There's the Capitol building,

611
00:47:51,320 --> 00:47:54,400
the seat of government
here in America.

612
00:47:56,920 --> 00:47:59,320
The Congressman for Youngstown
is behind a bill

613
00:47:59,320 --> 00:48:02,840
which would allow America
to impose trade tariffs

614
00:48:02,840 --> 00:48:05,640
on a much wider range
of Chinese goods.

615
00:48:05,640 --> 00:48:09,360
He maintains that as well as
subsidizing its industry,

616
00:48:09,360 --> 00:48:11,440
China is keeping its currency

617
00:48:11,440 --> 00:48:14,600
artificially low
compared to the dollar,

618
00:48:14,600 --> 00:48:19,240
which helps make Chinese imports
cheaper than America goods.

619
00:48:19,240 --> 00:48:21,200
Hey! Good to see you.
I'm Justin from the BBC.

620
00:48:21,200 --> 00:48:22,960
Hi, Justin. Come on in. 

621
00:48:22,960 --> 00:48:28,760
'Congressman Tim Ryan believes this
gives China an unfair advantage.'

622
00:48:28,760 --> 00:48:32,560
It's very important that,
as we have this discussion,

623
00:48:32,560 --> 00:48:34,920
that the first protectionist move,

624
00:48:34,920 --> 00:48:36,720
the first unfair trade move,

625
00:48:36,720 --> 00:48:41,240
is on behalf of the Chinese, through
their subsidising of their products,

626
00:48:41,240 --> 00:48:45,160
through their manipulation
of their currency.

627
00:48:45,160 --> 00:48:49,560
That's the first volley
into unfair trade practices.

628
00:48:49,560 --> 00:48:51,760
Isn't there a danger that
as soon as America

629
00:48:51,760 --> 00:48:55,400
begins to put tariffs on certain
products, the Chinese will respond,

630
00:48:55,400 --> 00:48:58,400
and the danger is then
you get the possibility

631
00:48:58,400 --> 00:49:01,120
of a trade war between
China and America.

632
00:49:01,120 --> 00:49:05,080
Well, I don't think a massive trade
war is in anybody's interest,

633
00:49:05,080 --> 00:49:07,120
but the question that we ask here

634
00:49:07,120 --> 00:49:09,200
in the United States, is,

635
00:49:09,200 --> 00:49:13,800
what do you do, just continue
to let the other side cheat,

636
00:49:13,800 --> 00:49:16,440
and you do nothing
while we lose industry,

637
00:49:16,440 --> 00:49:21,040
we're losing middle class workers,
we're losing Mom and Pop businesses?

638
00:49:21,040 --> 00:49:22,560
So do you just stay and say,

639
00:49:22,560 --> 00:49:25,280
"Well, it could get
worse if we don't respond,

640
00:49:25,280 --> 00:49:27,720
"so we're going to let
you keep beating us up

641
00:49:27,720 --> 00:49:30,200
"and we're never going
to swing back

642
00:49:30,200 --> 00:49:33,040
"for fear that
it may turn into a brawl"?

643
00:49:33,040 --> 00:49:35,080
Well, every now and again, you know,

644
00:49:35,080 --> 00:49:38,880
you may have to have a dust-up and
then things will settle back down.

645
00:49:38,880 --> 00:49:42,560
And a "dust-up" may be on the cards.

646
00:49:47,720 --> 00:49:49,800
China has now slapped tariffs

647
00:49:49,800 --> 00:49:53,760
on some American-produced
poultry products

648
00:49:53,760 --> 00:49:57,520
including chicken feet, considered
a delicacy by many Chinese.

649
00:50:08,240 --> 00:50:10,440
Chicken feet! Oh, right!

650
00:50:10,440 --> 00:50:13,800
'I sat down to dinner
with Ryan Avent,

651
00:50:13,800 --> 00:50:18,920
'from the Economist Magazine,
to chew over a few of the issues.'

652
00:50:22,200 --> 00:50:25,560
America's slapped some tariffs
onto products coming in from China.

653
00:50:25,560 --> 00:50:28,240
China's responded by slapping
tariffs on things like chicken feet.

654
00:50:28,240 --> 00:50:30,840
How likely is it
there's a trade war?

655
00:50:30,840 --> 00:50:33,520
I think there's a risk that
the US will impose tariffs,

656
00:50:33,520 --> 00:50:36,560
that China will react
as most countries probably would

657
00:50:36,560 --> 00:50:39,680
by retaliating, and that
we find ourselves in a trade war.

658
00:50:39,680 --> 00:50:43,560
The question is, how dangerous is
that scenario likely to be?

659
00:50:43,560 --> 00:50:46,960
At the same time I think
it's important to recognise that

660
00:50:46,960 --> 00:50:50,200
over the last few years, as a lot of
the global economy has been weak,

661
00:50:50,200 --> 00:50:53,760
a big engine for recovery that's
provided a large share of growth

662
00:50:53,760 --> 00:50:58,200
has been China,
it's continued to grow
at close to double digit rates.

663
00:50:58,200 --> 00:51:02,360
And if we lost that growth engine,
which we might well do if we impacted

664
00:51:02,360 --> 00:51:06,320
China's exports, then the global
recovery itself might be in danger.

665
00:51:06,320 --> 00:51:09,960
Certainly with the crisis in Europe,
you know, it's not hard to imagine

666
00:51:09,960 --> 00:51:13,080
the world falling
back into recession.

667
00:51:19,320 --> 00:51:24,280
A trade war between America
and China would have serious
repercussions for us all,

668
00:51:24,280 --> 00:51:27,000
but could things
get even more out of hand?

669
00:51:35,400 --> 00:51:41,200
I headed to a secret location in
the Pacific, to visit a destroyer,

670
00:51:41,200 --> 00:51:44,760
just one small but very powerful
part of the vast fleet

671
00:51:44,760 --> 00:51:47,680
America is moving
to the seas around China.

672
00:51:52,120 --> 00:51:55,640
Strategic bombers, aircraft carriers

673
00:51:55,640 --> 00:51:59,400
and some 60% of
America's submarine fleet

674
00:51:59,400 --> 00:52:03,280
have been deployed
to the Pacific region.

675
00:52:16,360 --> 00:52:19,040
Steer course, 340.

676
00:52:20,360 --> 00:52:23,640
What worries America
is that in recent years

677
00:52:23,640 --> 00:52:25,360
the Chinese have been
investing in systems

678
00:52:25,360 --> 00:52:30,360
that aren't about defending itself,
but are primarily offensive,

679
00:52:30,360 --> 00:52:32,640
about projecting power abroad.

680
00:52:32,640 --> 00:52:36,600
Chinese weapons can now
target Taiwan, Japan,

681
00:52:36,600 --> 00:52:40,240
and the massive
America naval base in Guam.

682
00:52:43,360 --> 00:52:45,000
This ship is about to be deployed

683
00:52:45,000 --> 00:52:47,840
as part of a major naval exercise
off the coast of China.

684
00:52:47,840 --> 00:52:50,440
Now, in a combat situation the
Captain, Commander Quinn here,

685
00:52:50,440 --> 00:52:53,760
has a range of weapon systems
at his disposal.

686
00:52:53,760 --> 00:52:56,880
He's got state of the art radar
technology which would allow him

687
00:52:56,880 --> 00:53:02,000
to attack on the surface,
underwater and in the air.

688
00:53:06,880 --> 00:53:12,240
Michele Flournoy is the
U.S. Undersecretary
of Defence for Policy.

689
00:53:12,240 --> 00:53:16,640
Her department has just completed
a report on the military power

690
00:53:16,640 --> 00:53:19,840
of China, which warns of a
heightened effort

691
00:53:19,840 --> 00:53:24,560
by the Chinese to challenge
America's supremacy in the Pacific.

692
00:53:24,560 --> 00:53:27,840
Why are you worried? 
I think over the last several years,

693
00:53:27,840 --> 00:53:31,000
we've seen them make
a concerted investment

694
00:53:31,000 --> 00:53:33,760
in a number of advanced technologies.

695
00:53:33,760 --> 00:53:37,520
A growing number of submarines,
ballistic missiles, cruise missiles.

696
00:53:37,520 --> 00:53:41,400
And the issue is that there's
not a lot of transparency

697
00:53:41,400 --> 00:53:44,120
about what's driving this build-up.

698
00:53:44,120 --> 00:53:47,440
It seems to us that the kinds
of capabilities they're acquiring

699
00:53:47,440 --> 00:53:52,960
are beyond what's needed for sort of
traditional territorial self-defence.

700
00:53:52,960 --> 00:53:56,560
You know, China sits astride
international waters,

701
00:53:56,560 --> 00:54:01,120
international air space,
that is in a region of the world

702
00:54:01,120 --> 00:54:04,800
that is the engine room
of the global economy.

703
00:54:04,800 --> 00:54:06,720
Global commerce passes through,

704
00:54:06,920 --> 00:54:10,160
trade flows,
and it's absolutely critical

705
00:54:10,160 --> 00:54:12,480
that it remains stable,

706
00:54:12,480 --> 00:54:15,840
that it remains governed by
international law

707
00:54:15,840 --> 00:54:17,440
and rules of the road.

708
00:54:30,320 --> 00:54:34,200
China is flexing its military
muscle on the international stage

709
00:54:34,200 --> 00:54:38,560
as well as threatening
America's global economic supremacy.

710
00:54:38,560 --> 00:54:40,680
This challenges the world order

711
00:54:40,680 --> 00:54:44,000
that has prevailed since
the end of the Cold War.

712
00:54:44,000 --> 00:54:48,000
Totalitarian China
is rewriting the rules of the game.

713
00:54:50,480 --> 00:54:54,320
The guy we're about to meet is one
of the most influential

714
00:54:54,320 --> 00:54:57,280
foreign affairs commentators
in America.

715
00:54:57,280 --> 00:55:00,960
He's a three times Pulitzer Prize
winner and he's got a great house.

716
00:55:05,280 --> 00:55:08,720
He's called Thomas Friedman.

717
00:55:11,640 --> 00:55:17,920
How much is the rise of China
kind of unsettling the world order?

718
00:55:17,920 --> 00:55:22,320
Well, I think you have to understand,
the rise of China is happening,

719
00:55:22,320 --> 00:55:25,560
I say this as an American,
at a time when we are stagnating.

720
00:55:25,560 --> 00:55:29,200
So it's not just that we are rising,
China's rising,

721
00:55:29,200 --> 00:55:33,000
and maybe China's relatively
rising a little faster.

722
00:55:33,000 --> 00:55:36,880
I would argue it's coming at a time
when America has never been more

723
00:55:36,880 --> 00:55:42,840
paralysed, more at war with itself at
home, more stagnating in the areas

724
00:55:42,840 --> 00:55:44,840
of infrastructure, education,

725
00:55:44,840 --> 00:55:48,000
precisely the areas we
see China vaulting ahead on.

726
00:55:56,800 --> 00:55:59,000
What's most unsettling about China

727
00:55:59,000 --> 00:56:02,960
to Americans, is not their
communism, it's their capitalism.

728
00:56:05,040 --> 00:56:08,160
We see in China, things
we used to see in ourselves,

729
00:56:08,160 --> 00:56:13,720
can do, get it done, hard work,
sacrifice, own the future.

730
00:56:13,720 --> 00:56:17,040
That used to be us

731
00:56:17,040 --> 00:56:19,760
and now we see it in them.

732
00:56:25,640 --> 00:56:29,120
If we go weak, your kids won't just
grow up in a different America,

733
00:56:29,120 --> 00:56:31,240
they will grow up
in a different world.

734
00:56:35,520 --> 00:56:40,320
And it's a world where somebody else
will be setting a lot of the rules,

735
00:56:40,320 --> 00:56:44,480
and dictating a lot of, you know,
who does what, where, when and how.

736
00:56:49,120 --> 00:56:52,520
But I know what world I would
want my kids to grow up in,

737
00:56:52,520 --> 00:56:55,680
and it's a world where
there is a strong America

738
00:56:55,680 --> 00:56:58,880
counterbalancing a strong
and thriving China,

739
00:56:58,880 --> 00:57:02,600
not one where you have a strong
and rising China

740
00:57:02,600 --> 00:57:06,800
and an America that is at
war with itself, uncertain,

741
00:57:06,800 --> 00:57:09,200
weak and really unable
to project power,

742
00:57:09,200 --> 00:57:12,680
economically and militarily,
the way it historically did.

743
00:57:16,320 --> 00:57:19,400
There is no question that
China's expansion into the world

744
00:57:19,400 --> 00:57:22,480
is transforming not just
the global economy,

745
00:57:22,480 --> 00:57:24,840
but also the balance of world power.

746
00:57:27,640 --> 00:57:30,440
In this epic journey
across three continents,

747
00:57:30,440 --> 00:57:35,560
I've seen how the rise of China
is powering extraordinary booms

748
00:57:35,560 --> 00:57:38,920
in countries rich
in natural resources,

749
00:57:38,920 --> 00:57:43,000
and how cheap Chinese goods
have driven down living costs

750
00:57:43,000 --> 00:57:45,200
for almost everyone on earth.

751
00:57:47,360 --> 00:57:50,200
But I've also seen the price
that is being paid,

752
00:57:50,200 --> 00:57:53,960
the environmental damage
this rush for resources is wreaking

753
00:57:53,960 --> 00:57:57,600
and how it's undermining local
businesses almost everywhere.

754
00:58:01,000 --> 00:58:05,840
It seems certain that the 21st
century will be China's century

755
00:58:05,840 --> 00:58:08,960
and there is no doubt
that the rise of China

756
00:58:08,960 --> 00:58:12,000
will profoundly affect
all of our lives.

757
00:58:24,240 --> 00:58:27,280
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758
00:58:27,280 --> 00:58:30,320
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