American CEOs used to swoon over China. Its huge pool of shoppers has been a magnetic draw for many years. However doing industry there has turn into so fraught and dangerous – with highbrow belongings robbery and an expanded espionage legislation used to intimidate the industry neighborhood – that U.S. firms have pressed the pause button.On height of that, the U.S.-China courting has turn into contentious due in part to Beijing’s belligerent task towards Taiwan and within the South China Sea, the balloon secret agent incident of remaining 12 months, and the record is going on.
Making issues worse, the Chinese language financial system has hit a wall: export progress is slowing, the rustic’s drowning in debt, and formative years unemployment has soared.
Click on right here to view comparable media.
click on to extend
Entering China to inform that tale is all however unimaginable for many Western reporters. But if the U.S. ambassador, Nicholas Burns, invited us to come back for a seek advice from and an interview, we had been granted visas. We spoke with him at his place of abode in Beijing. Nicholas Burns: More cash is leaving China for the primary time in 40 years than is coming in from American, Eastern, Eu, Korean buyers.
U.S. Ambassador to China Nicholas Burns
60 Mins
Lesley Stahl: Now why is that? And what kind of of an issue is that for them?Nicholas Burns: That is an actual drawback for this financial system. They have got 1.4 billion folks right here. They have got gotta stay it rising, and overseas capital is necessary. You ask why. I believe there is been a contradiction within the messaging from the federal government right here in China to the remainder of the sector. At the one hand, they are saying, “We are open for industry. We would like American, Chi– Eastern companies right here.” However then again, they have got raided six or seven American companies since remaining March.
Lesley Stahl: Raided?Nicholas Burns: Raided. They have got long gone into American firms and close them down and made accusations we consider are very a lot unwarranted.The American firms come with Bain & Corporate and— the Mintz Workforce, an organization that does due diligence for different firms that would possibly wish to make investments right here, become raided remaining 12 months. 5 of its Chinese language workers had been taken into custody, and they are nonetheless there. Some other company, Capvision, become raided. Lest the message wasn’t loud and transparent, a record about it become placed on state-run tv.It accused Western consulting companies of espionage and stealing nationwide safety and armed forces secrets and techniques.
Lesley Stahl: They would like the funding to come back again and they are raiding American firms? And they are–Nicholas Burns: Sure. They have got handed an modification to their counter-espionage legislation and it is written in this kind of basic manner that it may well be that American industry folks may well be accused of espionage for attractive in practices which can be completely prison and applicable all over the place else within the world– amassing information to do due diligence so as to make a decision whether or not you need to put money into an organization or shape a three way partnership, proper? Lesley Stahl: What do you suppose the Chinese language are afraid that those firms are gonna in finding out, those due diligence firms? What are they being concerned about? Nicholas Burns: , I believe they wish to keep watch over information concerning the Chinese language folks, about Chinese language firms. And so– that I believe is on the center of the issue with the ones American firms running in that sphere.Ambassador Burns advised us that is simply probably the most considerations he hears about.
Nicholas Burns: There’s nonetheless highbrow belongings robbery from American firms right here.Lesley Stahl: Is each American corporate frightened of that?Nicholas Burns: Sure.A wide variety of U.S. firms started flocking to China within the early Eighties after the rustic opened to the West below then-leader Deng Xiaoping. And now, U.S. banks function right here. Walmart has greater than 300 shops around the nation. Customers, right here in Shanghai, should buy Levi’s, browse in an Apple retailer, and get a caramel frappuccino.
Lesley Stahl and U.S. Ambassador to China Nicholas Burns
60 Mins
Nicholas Burns: Starbucks has 6,000 shops in China, 1,000 shops in Shanghai, they usually wish to stay development as a result of coffee–this become a tea tradition—
Lesley Stahl: Proper, yeah. Nicholas Burns: –for loads of years. It is now turning into, a minimum of with the younger Chinese language, a espresso tradition, and—Lesley Stahl: They usually love Starbucks?Nicholas Burns: They love Starbucks. And I will purchase you a cappuccino.Lesley Stahl: I will take one, thanks.
Boeing’s right here. So is Tesla, Pfizer, Chevron, Intel. However whilst some companies are thriving, lots of the overseas firms are frightened concerning the industry local weather below President Xi Jinping. Nicholas Burns: In the event you observe China from the loss of life of Mao to the outlet of China to the sector, we have noticed a last of varieties. We have noticed a centralization of energy of the Birthday celebration. We have noticed larger repression of the folk of China right here. That is an overly vital pattern simply during the last decade.Lesley Stahl: With Xi.Nicholas Burns: Beneath his management.A part of that pattern comprises President Xi’s reversing lots of the marketplace reforms that unleashed China’s financial miracle.
Nicholas Burns: They have got been rising over 40 years, the quickest progress charge in recorded financial history–8, 9, 10, 11% progress charges. They have got lifted 800 million folks out of poverty. However what is going down is that progress charge is slowing down. Maximum economists at the moment are projecting [that] they are going to be at 2, 3, 4% progress, perhaps even decrease within the subsequent decade–Lesley Stahl: Can they enhance their society if it is that low?Nicholas Burns: That is gonna be tricky for them. Lesley Stahl: If there become such a lot explosive growth– if that is so many of us had been lifted out of poverty, why is he turning clear of what labored? Nicholas Burns: Neatly, I believe they have got were given perhaps competing priorities. The federal government right here in China undoubtedly desires the financial system to develop, however they actually have a nationwide safety mindset. They wish to keep watch over information. They would like to–
Lesley Stahl: However that is extra necessary, the keep watch over, proper? Than financial progress. It kind of feels that manner. Nicholas Burns: I believe it is open for debate. You are listening to, we’re listening to each messages. Lesley Stahl: Apparently you your self have no idea the route it is going. Nicholas Burns: What I understand this is that the higher power is with the ones at the nationwide safety facet of the federal government of China.Nicholas Burns: Excellent morning, how are you?
On a teach travel from Beijing to Shanghai, the ambassador identified that within the a long time earlier than President Xi, China powered its financial system through making an investment in those high-speed trains, roads, factories, and skyscrapers that illuminate Shanghai–the monetary capital of China. However below President Xi, China misplaced greater than $120 billion price of long-term overseas investments remaining 12 months on account of the weakening financial system and the cruel govt ways, that have left American firms unsure of the long run there.Lesley Stahl: There are a large number of American firms right here. Have a large number of them simply picked up and left on account of this present industry surroundings?Nicholas Burns: , that is fascinating, no longer many. Lesley Stahl: Now not many.
Nicholas Burns: Now not many.Lesley Stahl: Why no longer? Nicholas Burns: China is the second one biggest financial system on the earth. It is a large marketplace. So, a couple of American firms have left, however maximum have stayed.Some American firms are shifting a minimum of a few of their operations to Singapore, Vietnam, Mexico. Lesley Stahl: However they are no longer leaving China. The marketplace’s so–
Nicholas Burns: They do not wish to go away.Lesley Stahl: –irresistible to American industry folks. It is gigantic. Nicholas Burns: Perhaps they are no longer leaving, however they are no longer making an investment, they are no longer making primary investments till they are able to see precisely the place the federal government is headed.But, on account of the 1.4 billion doable customers, some firms, like Disney, are expanding their funding.Shanghai Disneyland loudspeaker: “Welcome to Shanghai Disney Hotel.”
It lately expanded its Shanghai Disneyland that they advised us is flourishing.Aptar, a $9 billion corporate headquartered in Crystal Lake, Illinois, is every other American company bucking the craze of capital flight.President of Aptar Asia, Xiangwei Gong, a Chinese language-born U.S. citizen, confirmed us round one among their 5 production websites in China.
Xiangwei Gong speaks with Lesley Stahl
60 Mins
Xiangwei Gong: We’re production for one of the biggest U.S. brands– if truth be told, U.S. client manufacturers.This manufacturing facility makes the packaging and meting out gadgets for meals, pharmaceutical, and attractiveness merchandise offered in Asia.
Xiangwei Gong: All of our shoppers like P&G, L’Oréal, Estée Lauder, they are all right here doing industry.Aptar, in China for almost 30 years, lately invested $60 million in a brand new manufacturing facility. Xiangwei Gong says even in a slowing financial system, the corporate is doing neatly.Lesley Stahl: American firms right here, because the Ambassador neatly is aware of, are pausing or reducing again on funding, however no longer this company. You are increasing. Xiangwei Gong: Neatly, as a result of we’re right here for the long-term and we consider within the intake energy of the emerging heart magnificence. It is 1.4 billion folks right here. And, believe, for– for instance, healthcare. And the similar with cosmetics and attractiveness and beverage. All– all the ones sectors–packaged foods–these are in reality the largest markets. And so– so we’re very assured concerning the long-term. Lesley Stahl: What does it say concerning the self belief, in reality, within the U.S.-China courting? It– it kind of feels to mention you consider that– that issues will what? I am asking, recuperate?
Xiangwei Gong: That is an ideal query for the Ambassador. I consider so, I’m hoping so.Nicholas Burns: , we’re going to see.If truth be told, Burns says he is cautious of the long run as the basic contention and distrust between the U.S. and China is shaking the boldness of the industry global and has driven our courting to its lowest level in half of a century.Lesley Stahl: Is it our best courting on the earth at this time?Nicholas Burns: That is crucial, best, and most threatening courting that america has on the earth at this time and can, I believe, for the following decade or so.
Lesley Stahl: I wish to quote you again to you, and let us know what you intended. You might have mentioned, “Divorce isn’t an choice.” Nicholas Burns: Proper. Our two nations must reside in combination. And this, I believe, is the best rigidity within the U.S.-China courting. China’s our most important competitor, and on the identical time, China is our 1/3 biggest business partner–750,000 American jobs at stake. Agriculture- China’s the most important marketplace for U.S. agriculture. One 5th of all of our export ag– merchandise from agriculture are despatched to China. That become $40.9 billion remaining 12 months.Lesley Stahl: So we will be able to’t have enough money in reality to have an actual wreck right here. Nicholas Burns: Neatly, it is sophisticated.Lesley Stahl: All the ones jobs would–
Nicholas Burns: It is sophisticated. Some individuals are pronouncing, “Neatly, we are so aggressive with China, we will have to finish the industrial courting.” Neatly, the end result of that will be 750,000 American households would not have the ability to put dinner at the desk. And so this makes for an awfully tricky balancing act in my process.Lesley Stahl: You are a Wallenda brother.Nicholas Burns: I have by no means considered myself that manner, however excessive wire–Lesley Stahl: However you are up on that tightrope. Nicholas Burns: Proper. Neatly, we have– we’ve competing pursuits right here, and balancing the ones pursuits is the truth within the U.S.-China courting. We are gonna compete. We need to compete responsibly and stay the peace between our nations. However we even have to interact.
One in each 5 folks on the earth is Chinese language; China’s inhabitants is 4 occasions that of the U.S. and the rustic is huge: 3.7 million sq. miles. It overlooks the Taiwan Strait, the place half of the sector’s business flows on a daily basis, and is situated about 100 miles clear of Taiwan. President Xi likes to mention that the East is emerging, the West is declining, however economically, the U.S. is flourishing in comparison to China. In December, Moody’s, the credit standing company, reduce its outlook for China to “detrimental.” And it is going through a long-term demographic bind: a decline within the beginning charge that professionals say is irreversible, which means the rustic is each getting older and shrinking.Ambassador Nicholas Burns took us on a excursion, beginning in Beijing. The ambassador and his spouse Libby love to take early morning walks via a park close to their place of abode. Nicholas Burns: It is a 600-year-old Ming Dynasty park known as Ritan Park. It is a position for a lotta retirees and a large number of younger folks, and it is greatly energetic.
U.S. Ambassador to China Nicholas Burns and his spouse stroll in a park with Lesley Stahl.
60 Mins
It is the place the locals come for his or her early morning routines like Tai Chi, yo-yo-ing, and ping pong.
Nicholas Burns: Oops!You could not inform from those scenes– Nicholas Burns: Whoa!–that China, the place the COVID pandemic started, remains to be rising from the trauma of President Xi Jinping’s oppressive zero-COVID coverage. Burns, 68, a occupation diplomat who has served in each Republican and Democratic administrations, were given to China on the top of the zero-COVID lockdowns and quarantines.
Nicholas Burns: When my spouse Libby and I arrived right here in early March of 2022, we had been quarantined on this area for 21 days, for 3 weeks. Shanghai, a metropolis of 26 million folks, become totally locked down for 63 days–Lesley Stahl: What was– what become that like, within the city–Nicholas Burns: Neatly, we had girls who had to give beginning and we needed to give you the chance to get them to the health center. We had American citizens who sought after to get out however needed to give you the chance out in their locked compounds to the airport. So, zero-COVID labored for some time. In ’20 and ’21, they’d very low, or quite decrease, an infection charges. However through 2022, it had in reality divided this society.It activate uncommon, standard protests. Then in December of 2022, President Xi ended the coverage swiftly. Joerg Wuttke: The very last thing this govt is gonna settle for this is volatility.
Volatility is one thing Joerg Wuttke, a German businessman, who is lived and labored in China for over 30 years, hadn’t noticed because the Tiananmen Sq. rebellion in 1989. He represents BASF, the sector’s biggest chemical manufacturer.
Joerg Wuttke
60 Mins
Lesley Stahl: You might have mentioned this can be a PTSD nation, post-traumatic tension dysfunction nation. What– what do you imply? Joerg Wuttke: Neatly, everyone has been traumatized through the lockdowns that happened in lots of towns throughout China. And the type of messaging that got here out of the management: “It is on your personal protection.” After which the lockdown become lifted– if truth be told it become extra a capitulation from the federal government. The lockdown mainly left. And– and prefer a tsunami–Lesley Stahl: They mentioned, “We had been flawed. We are gonna carry it?”Joerg Wuttke: They by no means mentioned they had been flawed. That is not the gadget to s– admit that they did one thing flawed. And you then mainly, like a tsunami, COVID become rolling around the nation.
Lesley Stahl: When they lifted it?Joerg Wuttke: December, January, I might say one billion folks had been inflamed. And undoubtedly a lot of people died. Unbiased analysts say that an estimated 1.4 million folks died. Joerg Wuttke: This sort of surroundings in reality adjustments your perspective in opposition to lifestyles. After which industry, we idea we are gonna have a comeback tale. And we had a excellent couple of weeks. After which the financial system mainly has been flat since. Lesley Stahl: , after COVID within the West, in america in particular, we did have an enormous, fast rebound. Why did not it occur right here?
Joerg Wuttke: Neatly, I believe that COVID additionally has lined up a few long-term issues that China has been increase. For instance, in the true property sector. We reported on the true property sector 10 years in the past with astonishing attractions like this–of empty structures in metropolis after metropolis around the nation.That is nowadays. An identical hollowed-out wastelands of unoccupied and unfinished residences referred to as ghost towns. Lesley Stahl: When I used to be right here 10 years in the past, I by no means anticipated to look those structures nonetheless right here.What become a housing bubble again then grew and in any case exploded. This actual property disaster lies on the center of China’s financial decline.
Lesley Stahl: Has any one counted up the collection of empty gadgets, I imply, throughout the entire nation?Joerg Wuttke: Neatly, the entire of Germany, we’ve 82 million folks, may just transfer in right here instantly, 80– 80 to 90 million residences are empty. Lesley Stahl: 80 to 90 million apartments–Joerg Wuttke: Sure, a minimum of.Lesley Stahl: –are empty?
Joerg Wuttke: Proper, unfinished.Over time, Chinese language banks readily loaned cash to the builders because the development increase created tens of millions of jobs and propelled China’s progress. However in 2020 the federal government, below President Xi, clamped down at the rampant borrowing, inflicting the foremost builders to default on their loans and run out of cash. Lesley Stahl: Take a look at that. The facade is not even completed –Joerg Wuttke: Yeah, yeah.
He says they could not even have enough money to take down the cranes. In January, Evergrande, as soon as China’s biggest developer, become ordered to liquidate its ultimate belongings.
60 Mins
Left within the lurch are tens of millions of Chinese language electorate who purchased those residences earlier than they had been constructed.Joerg Wuttke: The builders owe their shoppers that paid as much as the magnitude of $1 trillion. Lesley Stahl: So, if I did a down cost on any such residences, will I ever see that cash?Joerg Wuttke: No, you are going to no longer see the cash.
Lesley Stahl: It is long gone? It is vanished–Joerg Wuttke: It is long gone, it is completed. So, I imply, it is— it is in reality dramatic.Lesley Stahl: Ten years in the past, we had been advised that this become the best way folks put cash down for his or her nest egg.Joerg Wuttke: Proper.Lesley Stahl: For his or her retirement fund.
Joerg Wuttke: Sure.Lesley Stahl: Is that also the case? Joerg Wuttke: 66%, two-third of a circle of relatives family moderate wealth is in, in residences.That lack of wealth has depressed client spending and dragged down the financial system. We puzzled if the folk blame President Xi for that or for the COVID deaths. however it become unimaginable for us to gauge public opinion, or if it even issues.
Whilst nobody from the federal government would give us an interview, we had been in a position to be told, as Joerg Wuttke–who’s lived right here for 30 years–told us, it is not a good suggestion to wager towards the Chinese language folks. Lesley Stahl: What are one of the certain facets of the financial system right here? They do have a powerful production base nonetheless.Joerg Wuttke: Neatly, the massive phase is in reality between ears of the folk, the brains of the Chinese language marketers that if truth be told made this good fortune tale occur. China isn’t in reality excellent in fundamental analysis, however they’re incredible in construction. They’re world-champion in if truth be told making merchandise higher, sooner, and less expensive. Lesley Stahl: Are they higher?Joerg Wuttke: Sure they’re, in some spaces. Our Chinese language competition are respiring down our neck and mainly force a few of us out [of] the marketplace.
As an example, China now makes over 80% of all of the sun panels on the earth, dominates the wind turbine marketplace, is poised to overhaul Japan as the sector’s largest exporter of vehicles, and more–Nicholas Burns: They are the main business companion of two times as many nations on the earth as america, so they’ve international reach-Lesley Stahl: They are the main business companion?Nicholas Burns: With over 60 nations on the earth. And now, with heavy govt subsidies, it’s rapid turning into the chief in electrical automobiles. Closing quarter, the carmaker, Byd, surpassed Tesla because the best-selling EV maker on the earth.
Shanghai-based NIO is attempting to wreck via with high-tech inventions. In December, the corporate unveiled a brand new battery with a using vary of 620 miles, greater than 200 miles additional than Tesla’s top-end style.
William Li
60 Mins
Lesley Stahl: That is— that is great.William Li: That is our flagship. William Li, the CEO and founding father of NIO, says its battery switch era lets in house owners to switch out their depleted battery for a completely charged one in below 3 mins. William Li: Precisely it is two-and-a-half mins.
Lesley Stahl: Two-and-a-half mins?William Li: Two-and-a-half, sure. We already put in 2,200 switch stations throughout China. China could also be creating a humanoid robotic business. Lesley Stahl: Take a look at that. Alex Gu: After numerous years, it is coming true.
Alex Gu is the founder and CEO of Fourier Intelligence. Lesley Stahl: Hello there.Closing 12 months he introduced the GR-1, his first-generation humanoid. Alex Gu: We will be able to do arm, he can swing the arm. Yeah, you notice?Lesley Stahl: Oh, have a look at the arms. Oh my phrase. Can he play the piano?
Alex Gu: Yeah, long run without a doubt it could possibly.Lesley Stahl: Sooner or later.Additionally one day, he says, the robots may provide well being handle China’s swiftly getting older inhabitants.Alex Gu: Perhaps we will be able to, for instance, we will be able to far flung keep watch over such roughly robotic to lend a hand my grandpa, for instance. Yeah, I believe.Lesley Stahl: Yeah.
60 Mins
President Xi, who visited this corporate remaining 12 months, has known as for the mass manufacturing of humanoids through 2025.
President Xi Jinping, talking Mandarin all the way through Dec 31, 2023 speech (English translation): Some folks…with employment and lifestyles… In his annual New Yr’s speech, he talked concerning the nation’s financial woes and, for the primary time, stated the excessive unemployment charge. Nonetheless, he has laid out a long-term function of doubling China’s financial system through 2035 and surpassing the West in era.Nicholas Burns: Our firms and tech professionals are competing on AI and biotech and quantum arithmetic. All the ones technological advances will result in a brand new technology of army era. Our two militaries are vying for army supremacy—who is going to be probably the most robust in crucial, strategic a part of the sector, which is the Indo-Pacific.Presidents Biden and Xi met in San Francisco in November in hopes of re-establishing army communications between our two nations, which China had bring to a halt. Nicholas Burns: I believe we are again to a extra settled and strong courting between the 2 nations, however it is been a rollercoaster.
The low level, he says, become the secret agent balloon incident remaining 12 months. However there is additionally been the building up of army bases within the South China Sea, the rise of air sorties close to Taiwan, and the humming of U.S. army planes.Lesley Stahl: Do you notice a decreasing of the temperature within the South China Sea?Nicholas Burns: No, and that is the reason an issue.Lesley Stahl: You do not? Nicholas Burns: After which on Taiwan, following Speaker Pelosi’s seek advice from, we have noticed, now for 16 months, a miles upper charge of Chinese language each air task and naval task that is very intimidating, intended to intimidate—
Lesley Stahl: And that hasn’t– they have not pulled again on that?Nicholas Burns: –the Taiwan government. They have not pulled again on that. And I believe in the long run, they wish to turn into and overtake america because the dominant nation globally. And we don’t need that to occur. We do not wish to reside in an international the place the Chinese language are the dominant nation. Lesley Stahl: When the Chilly Struggle ended, all of us idea our gadget had gained.Nicholas Burns: Yeah.Lesley Stahl: , their gadget failed, our gadget rose up. Now he is come again and mentioned, “No, no, the Communist gadget’s the correct manner.” I suppose we did not bury that finally.
Nicholas Burns: , it is fascinating to match the previous Chilly Struggle with this time. What distinguishes this time as opposed to the previous Chilly Struggle: Soviet Union had a powerful army and nuclear guns. It had an overly susceptible financial system, which not at all competed with ours. China’s financial system may be very sturdy. We are coping with an adversary, a competitor in China more potent than the Soviet Union become within the Forties, 50s, 60s, 70s, and 80s. Lesley Stahl: So, if that become a chilly warfare, what are you calling this? Nicholas Burns: It is a pageant of concepts, a fight of concepts. Our thought, The us’s large thought of a democratic society and human freedom, as opposed to China’s thought {that a} Communist state is more potent than a democracy. We do not consider that. So, there is a fight right here as to whose concepts will have to lead the sector. And we consider the ones are American concepts.Produced through Richard Bonin and Mirella Brussani. Broadcast friends, Wren Woodson and Aria Een. Information affiliate, Jessica Langer. Edited through Peter M. Berman.
Extra from CBS Information
Lesley Stahl
One in all The us’s maximum known and skilled broadcast reporters, Lesley Stahl has been a 60 Mins correspondent since 1991.
