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  • >> 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, VERY SIMILAR.

  • 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