I'm on a journey in search of one of the biggest stories of our age -
the unstoppable global rise of China.
Oh, look at this.
On this stage of my journey, I'll be crossing the Americas,
from Brazil to the United States.
I visit the world's biggest mine, shipping millions of tons of iron ore to China.
What a monster!
And see how China's incredible hunger for resources threatens the world's largest rainforest.
You can see the devastation the charcoal process leaves.
I'll be discovering what it means for the people who live in the forest.
HE SHOUTS GREETING
And I'll be travelling across America to see how China's expansion
is devastating America's industrial heartlands.
They've packed up all the machines on site, and moved them to China.
So how is the relentless rise of China upsetting the balance of world power,
and what it will mean for us all?
We see in China things we used to see in ourselves.
Can do, get it done, hard work, sacrifice, own the future.
Wait a minute - that used to be us.
Fantastic! Amazing view.
This is Copacabana here.
Rio de Janeiro must be one of the most beautiful cities on Earth.
But nowadays, Brazil is much more than an exotic tourist destination.
It's one of the fastest growing economies on the planet, and a crucial player
in a new international order that is changing the face of the world.
I was heading 400km north of Rio to one of the largest construction sites in Brazil.
That is amazing.
This is what we came to see.
They call this the highway to China.
This pier is almost two miles long, stretching straight out into the Atlantic Ocean.
Millions of tons of iron ore, of soya, of grain
and millions of barrels of oil will be loaded onto ships here, heading east,
feeding China's seemingly insatiable appetite for resources.
The economic boom in China, more than 10,000 miles away,
has generated massive demand for raw materials and food.
Brazil is packed full of both, and this vast super-port at Acu will help increase this growing trade.
And at its centre there will be a steel plant built by Wuhan Iron and Steel,
a huge Chinese corporation.
The Acu super-port is the brainchild of Brazil's most successful entrepreneur.
The guy we are about to meet is worth 27 billion. 27 billion.
It's going to be interesting.
Eike Batista is the world's eighth richest man.
He made his first fortune in gold mining, lost it, and then made himself another.
Look at the view of Sugarloaf Mountain.
It doesn't get much better.
Hello, hello, everybody.
Hi, Eike. Thank you very much indeed for doing this interview. It's a pleasure.
It is clear that Eike, as everyone knows him in Brazil, is very proud of his super-port.
You have been to Acu? Have you seen the size of it?
It makes the Chinese jealous.
Eike's companies control huge reserves of raw materials - iron ore, natural gas and oil.
He believes his highway to China
will help solve Brazil's historic transport and infrastructure problems,
enabling it to export even more.
All the foreign companies that I've been talking to in the last 15 years,
they said to me, "Mr Batista, I love your country, you know,
"you have great potential consumer market,
"but we don't know how to get in, and how to get out of your country."
Now, Acu solves this for the industries, and it will bring Brazil's cost dramatically down.
How important a component of your vision of Acu, your vision for Brazil, is the demand from China?
Well, the Chinese are big consumers of oil, for sure,
gigantic consumers of oil, ethanol and food products.
Not only are we suppliers of resources to China,
China's industries are starting to move out of China. Wuhan is an example.
Chinese car manufacturing.
Others are coming.
It's a wonderful future for the two countries. And quite a good future for you?
Because you're already reckoned to be, are you, the worlds eighth richest man?
Are you really worth 27 billion?
More. More? Yes.
Listen, Brazil will help me to go much further.
And it is not just billionaires like Eike Batista
who have benefited from Brazil's lucrative trade with China.
The country has been transformed into an economic powerhouse.
But all economic revolutions come at a price.
I headed north to the Carajas region
in the Amazonian state of Para
to see the impact the boom is having on Brazil's interior.
There's only one way to get a true perspective
on the scale of China's trade with Brazil, and that is from the air.
I love flying in these little planes.
Whoa, there we go.
The Chinese are building cities faster than any country in history,
and their manufacturing industries continue to grow.
And this industrial expansion needs steel, and to make steel you need iron ore, and lots of it.
We are flying over the biggest mine complex in the entire world.
This place produces a quarter of a billion tones of iron ore every year.
A quarter of a billion tones, and by far its biggest customer is China.
In fact, last year China bought 60% of Brazil's entire iron ore output.
This seemingly endless complex of iron ore mines is owned by a Brazilian company, Vale.
Over the past decade, Vale's iron ore exports to China have grown almost fifteen-fold.
This has become seriously big business.
What a monster!
It literally is as big as a house. Unbelievable!
China has its own huge iron ore deposits, but the demand has far outstripped the supply.
And the ore here is far higher quality.
And it's this stuff that makes this mine so valuable.
It doesn't look like much. It looks like dirt.
But this is actually 65% pure iron, and it's this stuff that the Chinese want to get their hands on.
So, Cristiano, how much iron ore do you produce from these mines each day?
Each day, we produce 300,000 tonnes of material, each day.
And how much is that ore worth per tonne?
120.
120 per tonne?
300,000 tonnes, so that's what, 36 million worth of ore each day?
Yes, each day. Come on, how much profitable it?
I don't know if I can talk about this.
We're...
50%. You make 50% profit?
For all the operation that we have around the world.
Cristiano is being a bit coy because Vale in fact made over 6 billion
in profit last year, so it's an incredibly profitable company.
No, just for the third quarter.
Sorry, six billion in the last quarter!
In three months they made 6 billion. For sure.
So you're one of the most profitable companies in the entire world?
For sure, it's incredible, it's an incredible mine.
Increasingly, Chinese companies are setting up in partnership with companies here in Brazil.
In 2007 Chinese state-owned steel company Minmetals began a joint venture
with another Brazilian firm, Cosipar, to increase dramatically its production of pig iron -
lumps of raw iron that can then be turned into steel.
Well, that's the final product, that's the so-called pig iron.
This stuff, and it weighs quite a lot.
All ready to go off to China, where 70% of it's sold.
To turn the iron ore into pig iron, these blast furnaces provided
by the Chinese need to reach temperatures of 1,500 degrees centigrade.
To do this, companies like Cosipar need fuel. Lots and lots of fuel.
And here in the Amazon, there is a ready source of fuel - the trees.
And such is the demand that huge stretches of forest are illegally cut down,
and the wood is turned into charcoal to feed the furnaces.
One day, there was a forest here.
Once there was a forest here? Yes.
Today, we're on a raid with IBAMA, the Brazilian environment agency,
hoping to close down an illegal charcoal operation.
Roberto is in charge. Roberto, what can we expect when we get there?
TRANSLATION: The purpose of the mission is to locate and identify
a group of people involved with the illegal extraction of timber, to make charcoal.
What can you see? Smoke.
You can see smoke?
Go, go, go.
Is near.
Someone running down there.
There's a charcoal kiln.
He says everyone's run away. They obviously got wind of the fact that we were around.
You see the tracks of the motorbikes and the trucks.
He thinks somebody, perhaps on a motorbike,
told them that we were here, and they've all run off into the forest.
You can just see the devastation that this charcoal process leaves.
Oh, smoky!
Whoa, there we go.
So, Roberto, why do you smash these things up?
TRANSLATION: It's a way to send out a message, so the local community understands
that this kind of activity, as well as being illegal, is unsustainable.
While sustainable production is legal, investigations
have shown that some charcoal operations use what is in effect slave labour,
with entire families, including children, working in dirty, miserable conditions.
HE COUGHS
Go on, whoa! Yes!
CHEERING
Roberto and his team have been hot on the trail
of the companies involved in the illegal charcoal trade.
Roberto, what do these documents tell us?
TRANSLATION: This document shows that there is a system of laundering charcoal produced like this.
These are fraudulent documents.
It was destined for the company, Cosipar.
To Cosipar?
So this shows that Cosipar has been buying illegal charcoal, charcoal produced in places like this?
TRANSLATION: I am certain. This document was intercepted at the Cosipar gates.
These trucks partly offloaded at Cosipar, and we were able to take legal action.
Roberto believes that Brazilian pig iron manufacturer Cosipar has been buying illegal charcoal.
The company has "previous".
It's been fined repeatedly over many years.
Some of these fines are since Cosipar went into partnership with the Chinese.
So is it still buying charcoal from illegal camps?
Where does Cosipar buy its charcoal?
TRANSLATION: Usually we buy it from registered farms.
So you're saying it's legal charcoal?
Legal. Legal? Legal.
We've been to see IBAMA, and they've given us this list,
these are all the fines that have been imposed on Cosipar
for using illegal charcoal.
And IBAMA told us that they're certain that you're still using illegal charcoal.
TRANSLATION: No, that is not true.
On every occasion when something like this happens, we have always defended our case.
Hold on a second, why is IBAMA fining you again and again and again?
Look at all these fines.
TRANSLATION: The truth is, we are always looking for sustainability,
even with our own production of timber to be used in the process.
There were cases in the past, but we are working to put this right
day after day until we become 100% sustainable.
All of these fines are a matter of public record.
Do your Chinese partners have a problem with the way in which you're buying illegal charcoal?
Do the Chinese have a problem with this?
TRANSLATION: We've never had a problem. They don't have a problem?
TRANSLATION: No. As I've said, we are always trying to ease that situation,
and are looking for ways to make this situation legal.
OK, sorry enough, for me. Can't we finish the interview?
No, I finish.
But surely the Chinese buyers have a responsibility for making sure that your production is clean, is legal?
Cosipar has previously denied any wrongdoing over its charcoal supply.
It says its own trees will sustainably supply all its charcoal needs by 2015.
The destruction of the Amazonian rainforest has been going on for decades.
Paulo Adario is the head of Greenpeace Amazon,
who is charting the ongoing extent of deforestation here.
What's extraordinary looking down from the air, is just how degraded the land is.
There's a huge charcoal plant over there.
Probably 100 kilns down there just smoking away.
Burning up the forest.
So what's driving the deforestation in this part of the Amazon?
Here in the Amazon, the indigenous people have borne the brunt
of the world's hunger for natural resources, increasingly driven by China.
Wow, the canopy's really thick here.
This is one of the last areas of true rainforest left in this whole region of Brazil,
and there's a tribe living here called the Awa.
Their land's threatened by loggers and hunters who are encroaching on it,
and they've invited us here to see what's happening to them.
It was a unique chance to find out how the indigenous peoples of Brazil
are being affected by 21st-century globalisation.
Katu! Katu!
Katu!
Katu means "hello", apparently. Katu.
The Awa are one of the last nomadic peoples of the Amazon.
Their land is legally protected but still the loggers
bulldoze the forest and destroy their hunting grounds.
Emooka. Emooka, emooka. That means "I'm happy".
Here with the Awa.
Thank you.
Some Awa groups have still not been contacted, but this group of families has been settled
under the protection of FUNAI, the Brazilian government's Indian Affairs Department.
Wow, the village. Katu.
The Awa were keen to show me their forest and to take me on a hunt.
I'm not going to go like this. I'm not going to dress like this.
I'm not going to dress like that, no!
He wants me to dress like that.
I don't know what he's done but it doesn't look very comfortable. It's OK like this?
The Awa still live almost entirely from what they can hunt and gather from the forest.
Unfortunately for the Awa, the trees that feed them and the game
they hunt are also highly prized for their hard woods.
That's really spiky! Is it to eat?
That's nice, that's sweet.
China is the world's leading destination for illegal timber.
While it's easy to blame the Chinese,
many of the things they manufacture with Brazilian timber are exported to us in the West.
Wherever the wood ends up, the Awa have now lost half their territory and their nomadic way of life.
The Awa hunters took to me to see a Jatoba tree, a tropical hardwood which is in great demand in China.
The Awa regard them as precious too.
The reason Jatoba is so popular is this is a really beautiful hardwood,
and it's exported to China, where they make it into floors and furniture,
quite a lot of which is then sold on to America and to Europe.
That's why the loggers want it.
I was amazed and humbled by how welcoming the Awa people were to me.
After all, I'm one of the non-Indian enemies they spoke of.
And I think I must have lost some of my inhibitions when it was time to cool off.
I wasn't expecting what happened next, though.
He's going to tie me up.
They wanted to initiate me with their traditional adornment.
Argh, leave me alone!
They got me in the end.
You don't want to see it, you don't want to see it.
The Awa people seem to inhabit a different planet
to those who live in Brazil's mega-cities to the south.
But increasingly, all the people of the world are locked together through trade.
And all our lives are being changed by economic might of the emerging super power to the east.
This is a Chinese shop.
Made in China. Made in China. You know, made in China.
Yeah, made in China.
What about this one? Another Chinese shop.
Yes. So there are quite a few Chinese shops?
Si, si.
A Chinese businessman, Kuan Ta Shun, took me to Rio's main street market.
Many of the shops are now owned by Chinese people, but even more
striking is just how many of the things here are made in China.
TRANSLATION: A lot of products, in the last ten years, have been imported from China.
They come from China? They come from China.
All of these products would be Chinese?
All of the products you can see there, all of these products come from China.
Clothes, fabrics, toys, domestic utensils.
Why is it increasing so quickly?
TRANSLATION: It's due to the price. The Chinese goods are much cheaper.
So it's easier for them to compete.
It's the same story across the world.
Cheap Chinese manufacturing has kept prices low.
It's driven much of the economic growth we've enjoyed in the last couple of decades,
but not everyone benefits.
China's explosive growth is clearly creating bonanzas for some parts of the Brazilian economy,
but for others, it's becoming a burden, including for one of Brazil's most, erm,
emblematic products.
In the spiritual home of the bikini, cheap Chinese imports have flooded the market.
Tough research!
They're made here, in Brazil? Ah, OK, Brasilero. Si.
Let's buy a couple of them.
I'm not a great judge of ladies' swimwear.
Looks very small to me.
But maybe that's they way they wear them in Brazil.
I took the cheap bikinis I bought in the market to compare them with some quality made ones.
The bikini factory, eh? Thank you very much.
Hello, ladies. Hello.
How would the cheap bikinis I'd bought stand up to the scrutiny
of an expert, and were they the genuine article?
A lot of them say, look, "Made in Brazil".
So are these not Brazilian bikinis?
No, it's not a Brazilian bikini.
No way a bikini Brazilian.
No? How can you tell?
TRANSLATION: It's different, the fabric, the cut.
Really? So where do these come from, would you think?
I'd say from China.
The finishing is bad, the type of Lycra and the colours.
It's not the authentic Brazilian bikini.
The Enseada Da Praia bikini business has five shops and employs 49 people.
It used to have a big export business too, but recently the company has struggled.
So how much has the Chinese competition affected your business?
TRANSLATION: In four months of the year, I used to produce 20,000 pieces.
Now I can only make 10,000.
So it's halved? Si.
I used to export a lot.
And we had dreams for expanding our distribution into the Americas and Europe.
But demand went down because of the low prices of Chinese products and I had to abandon that dream.
I think the whole world should be worried by this threat
because every country has its own economy, its own specialties.
If China starts producing the typical products from every country then everybody will be affected.
I think it's very dangerous.
Competition from China clearly makes it difficult
for Brazilian manufacturers to compete on price alone.
But on the products themselves,
can the Brazilian consumer really tell the difference?
It was time to take my research into the field...
..Armed with both Chinese and Brazilian bikinis.
So we've come down to the beach to do a test,
to see whether the Chinese bikinis
live up to the high Brazilian standards,
so let's find out.
Hiya, we're doing a little test for the BBC
and we've bought some bikinis.
Some of these bikinis are Brazilian and some come from China.
Which are the good ones? OK, yeah.
Which ones do you think are...
They would be... No.
Sorry? No, the yellow one is the better.
This is very old school, this kind of, you know...
they call them curtains.
Oh, the sort of... Here on the top. The ruching, I think we call it.
So that's a bit small, isn't it? Yeah, that's really tiny.
Oh, my God.
These, I'd rather wear with a boyfriend
or a couple of boyfriends in a motel room,
if you know what I'm talking about.
Cos here in Brazil you have motel rooms, right, you pay by hour.
OK, all right! No more details.
OK, sorry. And what about this one?
Well, this is a Chinese one and this is a Brazilian one. I know.
So you chose one of the Chinese and one of the Brazilian ones.
Maybe I'm going to try this one in a bigger size.
You can try it now. Will you try that on for us?
Where do you want me to try? Here? She's got some towels. Sure.
Will you try one of our Chinese ones? Try this one.
I'll try this one. The flowers, yeah. Yeah.
What, now? Yeah, now.
'I thought that the real Brazilian bikinis were obviously better made.
'But for some,
'those cheap Chinese ones seem to hit the spot just as well.'
No, that's excellent. Very good.
Buy Chinese bikinis! They're the best.
I'm Brazilian and I approved. Kiss.
It's not just bikinis.
Whether it's laptops, cars or fridges,
the dilemma is the same.
We rely on cheap Chinese goods to improve our standards of living.
But at the same time, it threatens our own industries and jobs,
which is why so many people are worried
by the growing role of China.
I'm about to meet a linchpin of the Chinese community here in Brazil.
This guy is behind a lot of the big deals between China and Brazil.
Charles? Hello, hi, Charles. Hey. Thank you very much for having us.
How are you? Yeah, very well indeed, thank you very much.
Be careful with the stairs. This is a lovely place. Thank you.
'Charles Tang came to Brazil in the 1970s,'
and established the China-Brazil Chamber of Commerce.
He has extraordinary connections in both countries.
So how significant a trading partner is China for Brazil?
China has, in abundance, what Brazil needs.
Brazil needs capital investments to grow its economy and to create jobs.
And Brazil has, in abundance, what China needs.
Which is iron ore, other mineral resources,
petroleum now, with the pre-salt,
and, of course, soya beans
and agricultural products.
People see the rise of China, the increasing strength of China, and they're frightened.
They think, "The Chinese are coming.
"The Chinese are coming to take our resources, to exploit our economies."
Should they be frightened of China?
You know, China is not trying to conquer any territory.
China is not really trying to dominate any country.
China wants to do business.
They just want to buy, sell, invest.
And China is not colonising any country...
You're saying China trades with Africa and Brazil as equals?
China is not taking the resources away
without doing business and paying for it.
That is quite different, I think,
from my recollection of British imperial history.
The Chinese may not be building an empire,
but they are fast emerging as the next great superpower,
reshaping the world order.
Nowhere is this being felt more keenly than in America.
I headed for California.
Look at that, Los Angeles, The City Of Angels.
China now threatens America's dominant position in the world.
At current rates,
the Chinese economy will overtake America's within the next ten years.
Hacienda Heights is an unremarkable Los Angeles suburb.
Here, they've been doing their best
to prepare the next generation of Americans
for the challenge of China.
Hi, sorry I'm late. Can I come in?
Yes, please. Welcome!
Thank you very much. Hello, everybody! CHILDREN: Hello.
My name's Justin.
'Confucius Classrooms, as they're known,
'are teaching children across America Mandarin,
'and about Chinese culture.'
HE SPEAKS MANDARIN
Give him a hand! Excellent.
And that was, "Yesterday is Monday." "..Was Monday."
"Tomorrow is Monday."
Tomorrow is Monday.
'Here at Cedarlane Middle School,
'the lessons have been made compulsory for 11 to 13-year-olds.
'Jay Chen is a board member for the school district
'that took the decision to initiate the classes.'
Jay, why do you think it's important for children to learn Chinese?
It's absolutely essential that American students start learning Chinese,
especially at younger ages
because right now, China's our largest trading partner.
Chinese itself is the most widely- spoken first language in the world
and China's now the second largest economy in the world.
So if we want our students to be able to compete
in a world in which China's going to be a much larger player,
they need to start learning Chinese at an earlier age.
That means you're an excellent student. Give Justin a hand!
You earn one ticket that says, "You are an excellent student."
Oh, thank you. OK.
These classes may seem harmless enough,
but they sparked controversy and outrage here in Hacienda Heights
when it was announced that funding and textbooks
would be provided by the Chinese Communist government.
There's been a vocal protest from people who believe Beijing is using the classes
to smuggle pro-China propaganda
into American classrooms. I'm going to meet the campaigners now.
Why have you been opposed to the, erm...
the Chinese lessons here at Cedarlane?
Not opposed to them teaching Chinese,
we're opposed to them wanting to use communist Chinese teachers in here.
They're using communist Chinese books.
I'm against that completely - use books made in America.
I spent 30 years in a marine corps fighting communism,
then shot at communists, they shot at me and everything else.
My last breath - I'll fight communists.
We happen to love our country
and we don't want it infiltrated
by insidious methods of misinformation
coming into our schools.
Starting with youngsters - that's very insidious and wrong.
'Among the protestors was a Chinese immigrant, Kai Chen,
'who's a long-time campaigner against China's one-party state.'
Kai, why are you out here, why are you upset?
Well, you know, I'm from China.
You know, I came here in 1981
so, I know China through and through.
They don't even mention Tiananmen Square,
you know, in their own country.
They don't mention, you know, Great Leap Forward and Great Famine.
How tens of millions died by Mao
and that's all erased from Chinese textbook.
And if you don't explain that to the students,
that's a tremendous problem to me.
It's not what you teach,
it's what you don't teach that matters tremendously.
That's my point.
'I thought it might be worth inviting Jay
'to defend the merits of the Confucius Classroom scheme.'
Jay, do you want to come and talk to these people?
I think you're familiar with everybody here, aren't you? Yes, we've all met before.
Hi, how are you?
I'm all for learning Chinese, don't get me wrong,
but I'm against having Chinese books in that classroom
and also the word, Confucius.
I see nothing wrong with having a programme that promotes Chinese language and learning.
You work for us, we're taxpayers. There are over 60 Confucius Classrooms in the United States.
You operate under this premise
that China is just another normal country like America.
China is not.
China is not! China is a party state. It's not a country?
China is not even a government.
China's government serves the party's interest,
do you understand that?
I don't think we're in the business
of teaching children about countries being evil
and teaching children to be against certain things.
That's not what we here are about.
We're about educating students so they can make up their own mind.
Why can't you do away with the word Confucius or Hanban?
There's nothing wrong with the word Confucius. What is wrong with the word Confucius?
Because it comes from China and you got that money from China
and you've got to use that word.
Most things that we purchase in America come from China. It's a shame too.
Most of it's junk and poison too.
It's clear that this debate is not going to be resolved any time soon.
As a result of the protests,
the school has decided not to accept the funding from China,
but they still use the textbooks.
The disagreement here reflects a much wider discomfort about China
and the effect it's having on America.
That discomfort is turning to despair
in America's industrial heartlands.
# They built a blast furnace
# Here along the shore
# And they made the cannonballs
# That helped the Union win the war
# Here in Youngstown
# Here in Youngstown... #
Youngstown, Ohio, was the birthplace of the American steel industry.
Bruce Springsteen has described the city's decline.
# ..Sweet Jenny, I'm sinkin' down
# Here, darlin', in Youngstown... #
George and Sheila Calko,
showed me what used to be known as Steel Valley.
This is the birthplace of steel. It started over there and ran all the way through these buildings.
Right down the valley? It was about 37 miles. Wow.
'Four generations of George's family worked steel here,
'he's one of the few local people to still have a job in the industry.
'He knows the city's glorious history well.'
Steel from here went into the Empire State Building.
This is where they made steel for tanks in World War II.
This is where they made it.
The decline of the steel industry here in America,
has been mirrored by the growth of China's steel industry.
China now accounts for almost half of the world's steel production,
while in 2009, American output fell by a third.
The steel industry was the lifeblood of this community.
When one industry leaves in a one industry town...
you've got nothing to fall back on.
We're seeing bars going up on windows,
we're seeing people afraid to get out into their neighbourhoods,
to be a part of the community.
We see increase in crime, increase in violence.
You see trouble with drugs and alcohol addictions,
'George and Shelia took me to a closed-down steel works.'
This is over 100 years old.
It's been shut down for about two and a half years.
This is going on all over America's industrial heartland,
places like this are going out of business left and right.
They've packed up all the machines and they've moved them to China.
With its cheap labour and state support,
China's steel industry can produce steel very cheaply.
That's enticed increasing numbers of American manufacturers
who use steel in everything from cars to computers,
to move their production to China.
What we're losing is much more than just a product
that can be found in a store.
We're losing a culture and a way of life
and that's really tough to deal with,
that's the true heartbreak.
When I look inside that loading bay
and I see water that's been sitting there long enough
to let algae grow in it,
it's hard to deal with and hard to see
and hard to be hopeful for the future.
Sheila, how do you feel looking at this place?
You just think about all the people
that can't provide for their families any more,
people, you know, get addicted to drugs
and that's what I think about, and its hard.
You know those people.
I think it could have been saved.
I think if we would have valued people over profit, I think that...
..it could have been saved.
But there are a few steel companies that are thriving here.
In nearby Brookfield, a new 10 million steel pipe plant
has been doing good business, having found a way to defend itself
against the fierce competition from China.
So it's a bit like a nut and a bolt,
you're just creating two ends that you can screw together.
The owners of this plant were part of a campaign
to prove that the Chinese were selling steel pipes
below the cost of production
and unfairly undercutting American manufacturers.
As a result, the US slapped a multibillion dollar tariff,
or tax, on all seamless steel pipes imported from China.
It's transformed the prospects for the company,
and the 56 workers it now employs.
Machinist, Ken Boyles, says this is the best job he's had for years.
How has China affected your working life? It's ruined it.
I lost my jobs because of it.
Because of China? Because of China.
I had trouble finding employment for long periods of time.
I mean, my family and I struggled,
we had trouble putting food on the table at times.
So how has the job here changed things for you?
Oh, it's changed my life altogether.
I mean I'm working, we're making a good product,
I'm making a decent wage,
and it's so much better.
It's been ten years since I've had anything like this.
China has called the tariff "abusive protectionism",
and warned that it will take action.
Despite that threat, there's growing pressure in America
for further action against China.
My next destination is America's capital city, Washington D. C.
Wow. There's the Capitol building,
the seat of government here in America.
The Congressman for Youngstown is behind a bill
which would allow America to impose trade tariffs
on a much wider range of Chinese goods.
He maintains that as well as subsidizing its industry,
China is keeping its currency
artificially low compared to the dollar,
which helps make Chinese imports cheaper than America goods.
Hey! Good to see you. I'm Justin from the BBC.
Hi, Justin. Come on in.
'Congressman Tim Ryan believes this gives China an unfair advantage.'
It's very important that, as we have this discussion,
that the first protectionist move,
the first unfair trade move,
is on behalf of the Chinese, through their subsidising of their products,
through their manipulation of their currency.
That's the first volley into unfair trade practices.
Isn't there a danger that as soon as America
begins to put tariffs on certain products, the Chinese will respond,
and the danger is then you get the possibility
of a trade war between China and America.
Well, I don't think a massive trade war is in anybody's interest,
but the question that we ask here
in the United States, is,
what do you do, just continue to let the other side cheat,
and you do nothing while we lose industry,
we're losing middle class workers, we're losing Mom and Pop businesses?
So do you just stay and say,
"Well, it could get worse if we don't respond,
"so we're going to let you keep beating us up
"and we're never going to swing back
"for fear that it may turn into a brawl"?
Well, every now and again, you know,
you may have to have a dust-up and then things will settle back down.
And a "dust-up" may be on the cards.
China has now slapped tariffs
on some American-produced poultry products
including chicken feet, considered a delicacy by many Chinese.
Chicken feet! Oh, right!
'I sat down to dinner with Ryan Avent,
'from the Economist Magazine, to chew over a few of the issues.'
America's slapped some tariffs onto products coming in from China.
China's responded by slapping tariffs on things like chicken feet.
How likely is it there's a trade war?
I think there's a risk that the US will impose tariffs,
that China will react as most countries probably would
by retaliating, and that we find ourselves in a trade war.
The question is, how dangerous is that scenario likely to be?
At the same time I think it's important to recognise that
over the last few years, as a lot of the global economy has been weak,
a big engine for recovery that's provided a large share of growth
has been China, it's continued to grow at close to double digit rates.
And if we lost that growth engine, which we might well do if we impacted
China's exports, then the global recovery itself might be in danger.
Certainly with the crisis in Europe, you know, it's not hard to imagine
the world falling back into recession.
A trade war between America and China would have serious repercussions for us all,
but could things get even more out of hand?
I headed to a secret location in the Pacific, to visit a destroyer,
just one small but very powerful part of the vast fleet
America is moving to the seas around China.
Strategic bombers, aircraft carriers
and some 60% of America's submarine fleet
have been deployed to the Pacific region.
Steer course, 340.
What worries America is that in recent years
the Chinese have been investing in systems
that aren't about defending itself, but are primarily offensive,
about projecting power abroad.
Chinese weapons can now target Taiwan, Japan,
and the massive America naval base in Guam.
This ship is about to be deployed
as part of a major naval exercise off the coast of China.
Now, in a combat situation the Captain, Commander Quinn here,
has a range of weapon systems at his disposal.
He's got state of the art radar technology which would allow him
to attack on the surface, underwater and in the air.
Michele Flournoy is the U.S. Undersecretary of Defence for Policy.
Her department has just completed a report on the military power
of China, which warns of a heightened effort
by the Chinese to challenge America's supremacy in the Pacific.
Why are you worried? I think over the last several years,
we've seen them make a concerted investment
in a number of advanced technologies.
A growing number of submarines, ballistic missiles, cruise missiles.
And the issue is that there's not a lot of transparency
about what's driving this build-up.
It seems to us that the kinds of capabilities they're acquiring
are beyond what's needed for sort of traditional territorial self-defence.
You know, China sits astride international waters,
international air space, that is in a region of the world
that is the engine room of the global economy.
Global commerce passes through,
trade flows, and it's absolutely critical
that it remains stable,
that it remains governed by international law
and rules of the road.
China is flexing its military muscle on the international stage
as well as threatening America's global economic supremacy.
This challenges the world order
that has prevailed since the end of the Cold War.
Totalitarian China is rewriting the rules of the game.
The guy we're about to meet is one of the most influential
foreign affairs commentators in America.
He's a three times Pulitzer Prize winner and he's got a great house.
He's called Thomas Friedman.
How much is the rise of China kind of unsettling the world order?
Well, I think you have to understand, the rise of China is happening,
I say this as an American, at a time when we are stagnating.
So it's not just that we are rising, China's rising,
and maybe China's relatively rising a little faster.
I would argue it's coming at a time when America has never been more
paralysed, more at war with itself at home, more stagnating in the areas
of infrastructure, education,
precisely the areas we see China vaulting ahead on.
What's most unsettling about China
to Americans, is not their communism, it's their capitalism.
We see in China, things we used to see in ourselves,
can do, get it done, hard work, sacrifice, own the future.
That used to be us
and now we see it in them.
If we go weak, your kids won't just grow up in a different America,
they will grow up in a different world.
And it's a world where somebody else will be setting a lot of the rules,
and dictating a lot of, you know, who does what, where, when and how.
But I know what world I would want my kids to grow up in,
and it's a world where there is a strong America
counterbalancing a strong and thriving China,
not one where you have a strong and rising China
and an America that is at war with itself, uncertain,
weak and really unable to project power,
economically and militarily, the way it historically did.
There is no question that China's expansion into the world
is transforming not just the global economy,
but also the balance of world power.
In this epic journey across three continents,
I've seen how the rise of China is powering extraordinary booms
in countries rich in natural resources,
and how cheap Chinese goods have driven down living costs
for almost everyone on earth.
But I've also seen the price that is being paid,
the environmental damage this rush for resources is wreaking
and how it's undermining local businesses almost everywhere.
It seems certain that the 21st century will be China's century
and there is no doubt that the rise of China
will profoundly affect all of our lives.
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