Impact of U.S.-China trade war felt in both countries

Impact of U.S.-China trade war felt in both countries


>>Sreenivasan: NEWSHOUR’S
SERIES, “CHINA: POWER AND
PROSPERITY,” CONTINUES TONIGHT
WITH ONE OF THE MOST CRITICAL
ISSUES RANKLING U.S./CHINA
RELATIONS: TRADE.
THE TWO NATIONS’ DISPUTE HAS
LARGELY PLAYED OUT AS A TARIFF
WAR, BUT THERE ARE UNDERLYING
ISSUES AND ARGUMENTS ON BOTH
SIDES.
SO, IN PARTNERSHIP WITH THE
PULITZER CENTER, WE TELL THIS
STORY WITH TWO CORRESPONDENTS,
NICK SCHIFRIN AND KATRINA YU.
THEY BEGIN IN CHINA’S SILICON
VALLEY, SHENZHEN.
>>Yu: IN SHENZHEN’S
SEG-E-MARKET, YOU CAN BUY
ANYTHING ELECTRONIC.
THERE ARE TEN FLOORS OF CIRCUIT
BOARDS, BATTERY-POWERED
CHILDREN’S TOYS, DIGITAL
WATCHES, WIRELESS HEADPHONES,
EVEN BITCOIN-MINING COMPUTERS.
>>Schifrin: AND ALL OF THIS IS
SOLD ALL OVER THE WORLD BECAUSE
INTERNATIONAL COMPANIES HAVE
LONG TAPPED INTO CHINA’S MASSIVE
MARKET AND HUGE SUPPLY OF
RELIABLE LABOR.
>>Yu: IF YOU HAVE AN ELECTRONIC
PRODUCT THAT’S LABELED “MADE IN
CHINA,” THE CHANCES ARE ITS
PARTS COME FROM HERE AND END UP
ALL OVER THE WORLD, INCLUDING
THE U.S.
>>Schifrin: FOR DECADES, THE
WORLD’S TWO LARGEST ECONOMIES,
THE U.S. AND CHINA, HAVE BEEN
INTEGRATED.
BUT NOW, THE TRUMP
ADMINISTRATION IS TRYING TO
CHANGE THAT, AND THE TRADE WAR
IS NOT ONLY GOING TO AFFECT
AMERICAN BUSINESSES AND
CONSUMERS.
>>Yu: BUT ALSO BUSINESSES AND
CONSUMERS HERE IN CHINA.
SEG-E-MARKET HAS BEEN CALLED THE
BAROMETER OF CHINA’S ELECTRONICS
INDUSTRY.
COMPONENTS AND FINISHED PRODUCTS
ARE SOURCED FROM SUPER-FACTORIES
ALL OVER SHENZHEN.
MORE THAN 60,000 BUSINESSES HAVE
SET UP SHOP HERE.
WHILE THEY MAY SELL EVERYWHERE,
THIS YEAR, ALL EYES ARE ON THE
U.S.
>>(translated): I HOPE THE
TRADE WAR DOESN’T CONTINUE TO
GET WORSE.
LET’S KEEP A PEACEFUL
RELATIONSHIP.
DON’T RAISE TARIFFS BECAUSE NO
ONE WINS.
>>Yu: ALL THE VENDORS THAT WE
SPOKE TO BLAME PRESIDENT TRUMP
FOR THE TRADE WAR, AND SOME SAY
TRUMP FEELS THREATENED BY
CHINA’S SUCCESS…
>>(translated): CHINA’S
ELECTRONICS INDUSTRY IS PRETTY
GOOD.
NOW, TRUMP IS JUST TRYING TO
SUPPRESS CHINA’S DEVELOPMENT.
>>Yu: …THOUGH SOME FREELY
ADMIT TO SELLING COPIES OF U.S.
PRODUCTS.
I ASK HER IF THIS IS A GO-PRO.
>>(translated): NO, IT’S
NOT A GO-PRO.
GO-PRO IS MADE ABROAD, AND IT’S
VERY EXPENSIVE.
BUT THIS ONE IS CHEAP, AND IT’S
SIMILAR.
>>Yu: HOW SIMILAR, NICK?
>>Schifrin: WELL,VERYSIMILAR.
THE CHINESE SPORTSCAM LOOKS
EXACTLY LIKE THE AMERICAN
GO-PRO.
AT THIS CHINESE NEW BARLUN
STORE, TAKE A LOOK AT THE WORDS.
THE SNEAKERS AND THE WRITING
LOOK AN AWFUL LOT LIKE AMERICAN
NEW BALANCE.
THAT’S JUST TWO EXAMPLES OF
CHINESE COPYCATTING THAT THE
U.S. SAYS TURNED INTO THEFT ON
AN INDUSTRIALIZED SCALE.
THE U.S. HAS INDICTED HACKERS
CONNECTED TO THE CHINESE
MILITARY FOR STEALING SPECS OF
AN AMERICAN POWER PLANT SIMILAR
TO THIS MODEL, AND NAVIGATION
SATELLITE TECHNOLOGY.
AND THE U.S. SAYS THE MOST
EXPENSIVE WEAPONS SYSTEM EVER,
THE AMERICAN F-35, LOOKS JUST
LIKE THE CHINESE J-31 BECAUSE
CHINESE HACKERS STOLE THE
DESIGNS.
THE U.S. SAYS, IN JUST A FEW
DECADES, THEFT HELPED CHINA MAKE
ITS MILITARY WORLD-CLASS; AND
ITS COMPANIES, TECHNOLOGY
LEADERS.
>>THAT KIND OF TECHNOLOGICAL
ADVANCEMENT DOESN’T HAPPEN
ORGANICALLY.
>>Schifrin: JAKE PARKER HAS
LIVED IN BEIJING FOR A DECADE.
HE’S THE VICE PRESIDENT OF THE
U.S./CHINA BUSINESS COUNCIL,
WHICH ADVOCATES FOR AMERICAN
BUSINESSES IN CHINA.
>>CHINA’S SYSTEM IS SET UP IN
SUCH A WAY THAT THE STATE HAS
ACCESS TO INFORMATION THAT
COMPANIES WOULD CONSIDER TO BE
TRADE SECRETS.
THE AMOUNT OF INFORMATION THAT’S
TRANSFERRED TO THE CHINESE
GOVERNMENT GOES FAR BEYOND WHAT
WOULD BE EXPECTED IN ANOTHER
MARKET.
>>Schifrin: AS BUSINESSMAN…
>>YOU HANDLE IT, THEN.
>>Schifrin: …AND
PRESIDENTIAL CANDIDATE, DONALD
TRUMP HAS ACCUSED CHINA OF
PURSUING DECADES OF PREDATORY
TRADE PRACTICES.
>>WE CAN’T CONTINUE TO ALLOW
CHINA TO RAPE OUR COUNTRY, AND
THAT’S WHAT THEY’RE DOING.
IT’S THE GREATEST THEFT IN THE
HISTORY OF THE WORLD.
WHEN YOU SEE CHINA, THESE ARE
FIERCE PEOPLE IN TERMS OF
NEGOTIATION.
THEY WANT TO TAKE YOUR THROAT
OUT.
THEY WANT TO CUT YOU APART.
>>Schifrin: THE TRUMP
ADMINISTRATION HAS INCREASED
U.S. DEMANDS THAT CHINA STOP
INTELLECTUAL PROPERTY THEFT AND
WHAT THE U.S. CALLS OTHER UNFAIR
TRADE PRACTICES.
THE ADMINISTRATION HAS RELEASED
TWO MAJOR INVESTIGATIONS INTO
CHINESE CORPORATE THEFT AND
LABELED CHINESE COMPUTER,
TELECOM, AND TECHNOLOGY
COMPANIES RISKS TO AMERICAN
NATIONAL SECURITY.
>>PRESIDENT TRUMP HAS RAISED
ISSUES THAT HAVE BEEN AN
IRRITANT IN THE RELATIONSHIP FOR
A VERY, VERY LONG TIME…
>>YOU KNOW, WE’RE THE PIGGY
BANK THAT EVERYBODY STEALS FROM,
INCLUDING CHINA.
>>…THAT HAVE NOT BEEN
ADEQUATELY ADDRESSED BY THE
CHINESE SIDE.
AND FRANKLY, THOSE ISSUES GO TO
THE CORE OF HOW CHINA’S ECONOMIC
SYSTEM OPERATES, ITS STATE-OWNED
ENTERPRISE REFORM, ITS
INDUSTRIAL POLICY, ITS
SUBSIDIES, ITS OVERCAPACITY.
THESE ARE NOT GOING TO BE EASY
SOLUTIONS THAT CHINA’S GOING TO
BE ABLE TO IMPLEMENT
IMMEDIATELY.
>>Yu: THAT’S BECAUSE THOSE
PROTECTIONIST MEASURES AND
STATE-SPONSORED BUSINESS
DEVELOPMENT HAVE FUELED CHINA’S
RAPID ECONOMIC RISE.
NOWHERE IS THAT MORE OBVIOUS
THAN CHINA’S ARTIFICIAL
INTELLIGENCE, OR A.I., INDUSTRY.
IN CHINA’S NORTHEASTERN LIAONING
PROVINCE, EX-ROBOT IS WORKING ON
HUMAN-LIKE A.I. ROBOTS.
CHINA WANTS TO BE THE GLOBAL
CENTER FOR A.I. BY 2030, AND
SOME IN THE TRUMP ADMINISTRATION
BELIEVE CHINA IS FAST CLOSING
THE GAP ON THE U.S.’ DOMINANCE
OF A.I.
THEY CAN MIMIC FACIAL
EXPRESSIONS, RESPOND TO
QUESTIONS…
>>(SPEAKING IN CHINESE)
>>(SPEAKING IN CHINESE)
>>(SPEAKING IN CHINESE)
>>Yu: …AND EVEN HOST A TV
SHOW.
>>(SPEAKING IN CHINESE)
>>Yu: EX-ROBOT PRESIDENT YANG
DONGYUE SAYS HIS COMPANY WILL BE
ONE OF THE FIRST IN THE WORLD
WHOSE ROBOTS CAN REPLACE SERVICE
EMPLOYEES.
>>(translated): THEIR MAIN
FUNCTION IS TO COMMUNICATE WITH
PEOPLE, SO A GOOD APPEARANCE IS
A MUST.
IF THE ROBOT IS VERY GOOD-
LOOKING, LIKE A PRETTY LADY OR A
HANDSOME MAN, PEOPLE WILL FEEL
MORE PLEASANT WHEN TALKING WITH
THEM.
>>Yu: BEIJING HAS BEEN SO
DETERMINED TO CATCH UP AND
SURPASS THE U.S. IN A.I.
TECHNOLOGY, IT’S COMMITTED
$150 BILLION TO ITS DEVELOPMENT.
EX-ROBOT ACKNOWLEDGES THAT IT
RECEIVES GOVERNMENT SUBSIDIES
BUT REFUSES TO DISCLOSE HOW
MUCH.
MEANWHILE, CHINA ACCUSES THE
U.S. OF INVESTING BILLIONS ON
ITS OWN A.I. TECHNOLOGY, LIKE
THIS ROBOTIC PACK MULE THAT’S
BEING FUNDED BY PENTAGON
RESEARCH.
>>Schifrin: BUT KATRINA, THE
U.S. DENIES THAT PENTAGON
SPENDING IS A SUBSIDY AND
COMPLAINS CHINA’S SUBSIDIES ARE
INTO PRIVATE COMPANIES AND
CONCEALED IN EVERY INDUSTRY,
TILTING THE GLOBAL PLAYING FIELD
IN CHINA’S FAVOR AND VIOLATING
INTERNATIONAL TRADE RULES.
>>THE CHINESE COMMUNIST PARTY
HAS USED AN ARSENAL OF POLICIES
INCONSISTENT WITH FREE AND FAIR
TRADE.
THESE POLICIES HAVE BUILT
BEIJING’S MANUFACTURING BASE AT
THE EXPENSE OF ITS COMPETITORS,
ESPECIALLY THE UNITED STATES OF
AMERICA.
>>Yu: CHINA HAS BUILT ITS OWN
MANUFACTURING BASE THAT PROVIDES
CHEAP AND EFFICIENT LABOR, AND
MANY U.S. BUSINESSES USE IT TO
MAXIMIZE PROFITS.
SHANGHAI GENERAL SPORTS IS ONE
OF THE BIGGEST BICYCLE
MANUFACTURERS IN CHINA.
THE COMPANY PRODUCES MORE THAN
THREE MILLION BIKES EVERY YEAR.
C.E.O. LEI GE ATTRIBUTES THE
COMPANY’S SUCCESS TO BUILDING
CLOSE RELATIONSHIPS WITH HIS
PARTNERS ABROAD, PARTICULARLY IN
THE U.S.
>>WE WORK WITH OUR PARTNERS IN
THE STATES AS A FAMILY.
THAT’S WHY WE CAN BECOME SO
CLOSE.
>>Yu: THAT SUPPLY CHAIN
INTEGRATION HAS BUILT UP OVER 30
YEARS, AND IT MEANS THE TRADE
WAR HAS HIT SHANGHAI GENERAL
SPORTS AND MANY COMPANIES IN
CHINA THAT SELL TO THE U.S.
LEI HAS HAD TO LET GO ABOUT 30%
OF HIS STAFF.
IT DOESN’T HELP THAT CHINA’S
ECONOMIC GROWTH HAS SLUMPED TO
ITS LOWEST LEVEL IN NEARLY THREE
DECADES.
>>OH, WE HATE THIS.
IT’S JUST MORE DIFFICULT THAN
EVER.
OF COURSE, WE FEEL DISAPPOINTED,
AND WE FEEL UPSET, BUT THERE’S
NOTHING WE CAN DO.
>>Yu: THIS FACTORY PRODUCES UP
TO 13,000 BICYCLES EVERYDAY.
THEY’RE SENT TO COUNTRIES SUCH
AS AUSTRALIA, CANADA, AND JAPAN.
BUT 80% OF THEM ARE MADE FOR THE
UNITED STATES.
>>Schifrin: AND ARRIVE IN THIS
SOUTH CAROLINA FACTORY.
>>WE’RE PRODUCING THIS YEAR
ABOUT 300,000 BICYCLES.
>>Schifrin: ARNOLD KAMLER IS
ONE OF THE PRIMARY BUYERS OF
SHANGHAI GENERAL SPORTS’ PARTS.
HE’S THE CHAIRMAN AND C.E.O. OF
KENT BIKES, ONE OF THE LARGEST
BIKE WHOLESALERS IN THE U.S.
ON EVERY BIKE FRAME IMPORTED
FROM CHINA, KENT HAS TO PAY A
36% TARIFF TO U.S. CUSTOMS.
ON EVERY TIRE, IT’S 30%.
WHEN YOU PAY THAT AMOUNT TO U.S.
CUSTOMS, DO YOU THEREFORE
INCREASE YOUR PRICES TO YOUR
CLIENTS?
>>OH, OF COURSE.
THE BICYCLE BUSINESS IS A VERY
HIGH-VOLUME BUT– UNFORTUNATELY
FOR ME– A VERY LOW PROFIT-
MARGIN BUSINESS.
AND SO, WHEN WE HAVE AN INCREASE
OF THAT SIZE, WE HAVE NO CHOICE
BUT… BUT TO RAISE PRICES.
>>Schifrin: AND THOSE HIGHER
PRICES HAVE LED TO A 20% DROP IN
SALES SINCE THE TRADE WAR BEGAN.
AND THAT’S MEANT KAMLER’S HAD TO
LAY OFF A QUARTER OF HIS
EMPLOYEES.
>>THESE TARIFFS ARE HURTING US
VERY BADLY, BUT WE’RE A SMART
COMPANY.
AND SO, WE’LL OVERCOME THIS
CHALLENGE BY SOURCING ELSEWHERE
OVER TIME.
>>Yu: AND THAT’S EXACTLY WHAT’S
HAPPENING.
GENERAL SPORTS WILL TURN THIS
FIELD IN CAMBODIA INTO A
500,000-SQUARE FOOT FACTORY.
LEI SAYS IT’S AN INVESTMENT HE
WISHES HE DIDN’T HAVE TO MAKE
BECAUSE HE FEARS LABOR COSTS
WILL RISE.
>>I PREFER STAYING IN CHINA.
I SPEAK THE SAME LANGUAGE, AND
IT’S EASIER TO… TO FIND
WORKERS.
>>Schifrin: IT MAY NOT BE GOOD
FOR BUSINESSES, BUT DRIVING
COMPANIES OUT OF CHINA IS MUSIC
TO MANY IN THE TRUMP
ADMINISTRATIONS’ EARS.
SOME SENIOR ADVISORS WANT TO
CONTINUE ECONOMIC INTEGRATION
WITH CHINA, BUT OTHERS SEE CHINA
AS A NATIONAL SECURITY THREAT
AND WANT TO SEPARATE THE TWO
ECONOMIES.
PRESIDENT TRUMP HAS VACILLATED
BETWEEN THE CAMPS.
IN LATE AUGUST, HE TWEETED:
“OUR GREAT AMERICAN COMPANIES
ARE HEREBY ORDERED TO
IMMEDIATELY START LOOKING FOR AN
ALTERNATIVE TO CHINA.”
BUT AT THE G7 IN FRANCE JUST
THREE DAYS LATER, HE SAID
AMERICAN COMPANIES COULD STILL
THRIVE IN CHINA.
>>IF WE MAKE A DEAL, I’D LIKE
TO SEE THEM STAY THERE AND DO A
GREAT JOB.
>>Yu: ON CHINESE MEDIA,
COMMENTATORS ARGUE PRESIDENT
TRUMP’S FLIP-FLOPS SHOW HE’S
UNRELIABLE.
>>YOU CANNOT BE IN A SITUATION
WHERE I DON’T… I DON’T BELIEVE
WHAT YOU’RE SAYING, AND I DON’T
BELIEVE YOU’LL CARRY OUT EVEN IF
YOU DO.
HOW CAN I HAVE A NEGOTIATION
WITH YOU?
>>Yu: CHINA HAS TAKEN STEPS TO
ENSURE IT’S LESS VULNERABLE TO
TRUMP’S TRADE WAR SHOTS, FROM
BOOSTING DOMESTIC SUPPLIES OF
SOYBEANS, CORN AND COTTON, TO
EXPANDING EXPORT MARKETS BEYOND
THE U.S. TO AFRICA AND SOUTH
AMERICA.
WITH NO NEED FOR DEMOCRATIC
ELECTIONS AND WHAT IT CALLS A
HIGHER ECONOMIC “PAIN
THRESHOLD,” CHINESE TV SAYS
CHINA CAN OUTLAST TRUMP.
>>(translated): ANYONE WHO
MISJUDGES CHINA WILL SURELY PAY
THE PRICE OF THE CHINESE
PEOPLE’S STEEL WILL.
>>Schifrin: BUT PRESIDENT TRUMP
HAS SAIDHECAN OUTLAST CHINA
AND VOWS TO HOLD HIS GROUND,
EVEN IF THAT HARMS THE U.S.
ECONOMY SHORT-TERM.
>>I AM DOING THIS, WHETHER IT’S
GOOD OR BAD, FOR YOUR… YOUR
STATEMENT ABOUT, “OH, WILL WE
FALL INTO A RECESSION FOR TWO
MONTHS,” OKAY?
THE FACT IS, SOMEBODY HAD TO
TAKE CHINA ON.
MY LIFE WOULD BE A LOT EASIER IF
I DIDN’T TAKE CHINA ON.
BUT I LIKE DOING IT BECAUSE I
HAVE TO DO IT.
>>Schifrin: WHICH MEANS
U.S./CHINA COOPERATION IS
DECREASING AND CONFRONTATION IS
INCREASING.
>>Yu: AND THE TRADE WAR
CONTINUES AS TWO ECONOMIES THAT
HAVE BEEN INTEGRATED FOR DECADES
ARE ALREADY DRIFTING APART.
FOR THE PBS NEWSHOUR, I’M
KATRINA YU.
>>Schifrin: AND I’M NICK
SCHIFRIN.

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