American CEOs used to Swoon over China. Its vast pool of consumers has been a magnetic draw for decades but doing business there has become so fraught and risky with intellectual property theft and an expanded Espionage law used to intimidate the business community that us companies have pressed the pause button. On top of that the US China relationship has become contentious due partly to China's belligerent activity toward Taiwan and in the South China Sea the balloon spy incident of last year and the list goes on making matters worse the Chinese economy has hit a wall export growth is slowing the country's drowning in debt and youth unemployment has soared getting into China to tell tell that story is All But impossible for most western journalists but as we first reported in February when the US ambassador Nicholas Burns invited us to come for a visit and an interview we were granted visas we spoke with him at his residence in Beijing more money is leaving China for the first time in 40 years then is coming in from American Japanese European Korean investors now why is that and how much of a problem is that for them that's a real problem for this economy they have 1.4 billion people here they've got to keep it growing and foreign capital is important you ask why I think there's been a contradiction in the messaging from the government here in China to the rest of the world on the one hand they say we're open for business we want American CH Japanese businesses here but on the other hand they've rated six or seven American businesses since last March raid raid they've gone into American companies and shut them down and made accusations We Believe are very much unwarranted the American companies include banan company and the mince group a company that does due diligence for other companies that might want to invest here was raided last year five of its Chinese employees were taken into custody and they're still there another firm C Vision was raided L the message wasn't loud and clear a report about it was put on statun television it accused Western consulting firms of Espionage and stealing National Security and Military Secrets they want the investment to come back and they're raiding American companies and there they've passed an amendment to their counter Espionage law and it's written in such a general way that it could be that American Business people could be accused of Espionage for engaging in practices that are perfectly legal and acceptable everywhere else in the world collecting data to do due diligence so that you can decide whether you want to invest in a company or form a joint venture right what do you think the Chinese are afraid that these companies are going to find out these due diligence companies what are they worrying about you know I think they want to control data about the Chinese people about Chinese companies and so U that I think is at the heart of the problem with those American companies operating in that sphere Ambassador Burns told us that's just one of the concerns he hears about there is still intellectual property theft from American companies here is every American company afraid of that yes all kinds of us companies began flocking to China in the early 1980s after the country open to the West under then leader D sha ping and now US banks operate here Walmart has nearly 300 stores across the country Shoppers here in Shanghai can buy Levis browse in an Apple store and get a caramel frappuccino Starbucks has 6,000 stores in China a thousand stores in Shanghai and they want to keep building because coffee this was a tea culture for hundreds of years it's now becoming at least with the young Chinese a coffee culture and they love Starbucks they love Starbucks and I'll buy you a cappuccino I'll take one thank you Boeing's here so is Tesla fizer Chevron Intel but while some businesses are thriving many of the foreign companies are worried about the business climate under President Xi Jinping if you track China from the death of ma to the opening of China to the world we've seen a closing of sorts we've seen a centralization of power of the party we've seen increased repression of the people of China here that's a very significant Trend just over the last decade with shei under his leadership part of that Trend includes president xi's reversing many of the market reforms that Unleashed China's economic Miracle they've been growing over 40 years the fastest growth rate in recorded economic history 8 9 10 11% growth rates they've lifted 800 million people out of poverty but what's happening is that growth rate is slowing down most economists are now projecting they'll be at 2 three 4% growth maybe even lower in the next support their society if it's that low that's going to be difficult for them if there was so much explosive growth if so many people were lifted out of poverty why is he turning away from what worked well I think they've got maybe competing priorities the government here in China certainly wants the economy to grow but they also have a national security mindset they want to control data they want that's more important the control right than economic growth it seems that way I think it's open for debate you're hearing we are hearing both messages it sounds as if you yourself don't know the direction it's going what I perceive here is that the greater energy is with those on the National Security side of the government of China good morning how are you on a train trip from Beijing to Shanghai the Ambassador pointed out that in the decades before President XI China powered its economy by investing in these high-speed trains roads factories and skyscrapers that light up Shanghai the financial capital of China but under President XI China lost more than $120 billion worth of long-term foreign investments last year because of the weakening economy and the harsh government tactics which have left American companies uncertain of the future there there are a lot of American companies here have a lot of them just picked up and left because of this current business environment you know that's interesting not many not many not many why not China is the second largest economy in the world it's a big market so a few American companies have left but most have stayed some American companies are moving at least some of their operations to Singapore Vietnam Mexico but they're not leaving China the market irresistible to American Business people it's gigant antic maybe they're not leaving but they're not investing they're not making major Investments until they can see exactly where the government is head it yet because of the 1.4 billion potential consumers some companies like Disney are increasing their investment welcome to Shanghai Disney Resort it recently expanded its Shanghai Disneyland that they told us is thriving aptar a $9 billion company headquartered in Crystal Lake Illinois is another American firm bucking the trend of capital flight president of aptar Asia shangu gang a chinese-born US citizen showed us around one of their five manufacturing sites in China we are manufacturing for some of the largest US Brands actually the US consumer Brands this factory makes the packaging and dispensing devices for food food pharmaceutical and beauty products sold in Asia all of our customers like PNG L'Oreal they're all here doing business abtar in China for nearly 30 years recently invested $60 million in a new Factory shangu gang says even in a slowing economy the company is doing well American companies here as the Ambassador well knows are pausing or cutting back on investment but not this firm you're expanding well um because we are here for the longterm and we believe in the consumption Power Of The Rising middle class it's 1.4 billion people here and um imagine for for example health care and the same with um cosmetics and beauty and um beverage all all those sectors packaged Foods these are really the biggest market and so so we are very confident about uh the long term what does it say about the confidence really in the US China relationship it it seems to say you believe that that things will what I'm asking get better that's a great question for the Ambassador I believe so I hope so you know we'll see actually burn says he's wary of the future as the fundamental rivalry and mistrust between the US and China is shaking the confidence of the business world and has pushed our relationship to its lowest point in half a century is it our most competitive relationship in the world right now this is the most important most competitive and most dangerous relationship that the United States has in the world right now and will I think for the next decade or so I want to quote you back to you and tell us what you meant you have said divorce is not an option right our two countries have to live together and this I think is the greatest tension in the US China relationship China's our most significant competitor and at the same time China is our third largest trade partner 750,000 American jobs at stake agriculture China's the largest market for us agriculture 1 of all of our export products from agriculture are sent to China that was 40 .9 billion last year so we can't afford really to have a real break here well it's compc jobs would it's complicated some people are saying well we're so competitive with China we should end the economic relationship well the consequence of that would be 750,000 American families wouldn't be able to put dinner on the table and so this makes for an extraordinarily difficult Balancing Act in my job you're a willinda brother I've never thought of myself that way but high wire right well we have competing interests here and balancing those interests is the reality in the US China relationship we're going to compete we have to compete responsibly and keep the peace between our countries but we also have to engage more about The Balancing Act and the biggest economic problem in China today when we come back one in every five people in the world is Chinese China's population is four times that of the US and the country is vast 3.7 million square miles it overlooks the Taiwan straight where half the World's Trade flows every day and is located about 100 miles away from Taiwan President XI likes to say that the East is Rising the West is declining but economically the US is thriving compared to China in December Moody's the credit rating agency cut its outlook for China to negative and it's facing a long-term demographic bind a decline in the birth rate that experts say is irreversible meaning the country is both aging and shrinking Ambassador Nicholas Burns took us on a tour starting in Beijing the Ambassador and his wife Libby like to take early morning walks through a park near their [Music] residence this is a 600y old Ming Dynasty Park called Ron Park it's a place for a lot of retirees and a lot of young people and it's tremendously active it's where the locals come for their early morning routines like Tai Chi yo-yoing and pingpong [Laughter] oops you couldn't tell from these scenes that China where the co pandemic began is still emerging from the trauma of President XI jinping's oppressive zeroo policy Burns 68 a career Diplomat who is serving in both Republican and Democratic administrations got to China at the height of the zero covid lockdowns and quarantines when my wife Libby and I arrived here in early March of 2022 we were quarantined in this house for 21 days for 3 weeks Shanghai a city of 26 million people was completely locked down for 63 days what was that like in the city we had women who needed to give birth and we had to find a way to get them to the hospital we had Americans who wanted to get out but had to find a way out of their locked compounds to the airport so zero Co worked for a while in 20 and 21 they had very low or relatively lower infection rates but by 2022 it had really divided this Society it set off rare widespread protests then in December of 2022 president XI ended the policy abruptly the last thing this government is going to accept here is volatility volatility is something yorg woodka a German businessman who's lived and worked in China for over 30 years hadn't seen since the tianan square Uprising in 1989 he represents BASF the world's largest chemical producer you have said this is a PTSD country post-traumatic stress disorder country what what do you mean well everybody has been traumatized by the lockdowns that took place in many cities across China and the kind of messaging that came out of the leadership it's for your own safety and then the lockdown was lifted actually it was more a capitulation from the government the lockdown basically left and like a we were wrong we're going to lift it they never said they were wrong that's not the system to admit that they did something wrong and then you basically like a tsunami Co was rolling across the country after they lifted it uh December January I would say a billion people were infected and certainly lots of people died independent analysts say that an estimated 1.4 million people died this kind of environment really changes your attitude towards life and in business we thought we're going to have a comeback story and we had a good couple of weeks and then the economy basically has been fled since you know after covid in the west in the United States particularly we did have a huge quick rebound Why didn't it happen here well I think that Co also has covered up a couple of long-term problems that China has been building up for example in the real estate sector we reported on the real estate Sector 10 years ago with astonishing sites like this of empty buildings in city after city across the country this is today similar hollowed out wastelands of unoccupied and un finished Apartments known as ghost cities when I was here 10 years ago I never expected to see these buildings still here but was a housing bubble back then grew and finally exploded this real estate crisis lies at the heart of China's economic decline has anybody counted up the number of empty units I mean across the whole country well the whole of German we have 82 million people could move in here right away 80 80 to 90 million apartments are empty 80 to 90 million apartments are empty right I'm finished over the years Chinese Banks readily loan money to the developers as the building boom created millions of jobs and propelled China's growth but in 2020 the government under President XI clamped down on the rampant borrowing causing the major developers to default on their loans and run out of money look at that the facade isn't even finished he says they couldn't even afford to take down the cranes in January ever Grand once China's largest developer was ordered to liquidate its remaining assets left in the Lurch are millions of Chinese citizens who bought these apartments before they were built the developers ow the are uh customers that paid up uh to the magnitude of1 trillion us so if I did a down payment on one of these apartments right will I ever see that money no you will not see the money it's gone it's finished it's gone it's finished so I mean it's it's really dramatic 10 years ago we were told that this was the way people put money down for their nest egg right for their retirement fund is that still the case the 66% 23 of Family household average wealth is in in apartments that loss of wealth has depressed consumer spending and drag down the economy we wondered if the people blame president XI for that or for the covid deaths but it was impossible for us to gauge public opinion or if it even matters while no one from the government would give us an interview we were able to learn as yorg woodka who's lived here for 30 years told us it's not a good idea to bet against the Chinese people what are some of the positive aspects of the economy here they do have a strong U manufacturing base still well the big part is really between the ears of people the brains of the Chinese entrepreneurs that actually made this success story happen China is not really good in basic research but they're fantastic in development they're world champion in actually making products better faster and cheaper are they better yes they are some areas our Chinese competitors are breathing down our neck and basically Drive some of us out the market for instance China now makes over 80% of all the solar panels in the world it dominates the wind turbine market and last year became the world's biggest exporter of cars and more they're the leading trade partner of twice as many countries in the world as the United States so they have leading trade Aid partner with over 60 countries in the world and now with heavy government subsidies it is fast becoming a leader in electric vehicles the car maker byd is vying with Tesla for the title of best-selling EV maker in the world Shanghai based Neo is trying to break through with high-tech Innovations in December the company unveiled a new battery with a driving range of 6 20 M more than 200 M further than Tesla's topend model this is this is our Flagship William Lee the CEO and founder of Neo says its battery swap technology allows owners to swap out their depleted battery for a fully charged one in under 3 minutes exactly it's a uh two and a half minutes two and a half minutes two and a half yes we already installed 2,200 swap station around China China is also developing a humanoid robot industry look at that after lots of year it's coming true Alex goo is the founder and CEO of forier intelligence hi there last year he launched the gr1 his first generation humanoid we can do arm you can swing the arm yeah you see oh look at the fingers oh my word can you play the piano yeah future definitely can in the future also in the future he says the robots could provide health care for China's rapidly aging population maybe we can for example we can remote control such kind of robot to help my grandpa for example yeah I think president shei who visited this company last year has called for the mass production of humanoids by 2025 in his annual New Year's speech he talked about the country's economic woes and for the first time acknowledged the high unemployment rate still he has laid out a long-term goal of doubling China's economy by 2035 and surpassing the West in technology our companies and Tech experts are competing on AI and biotech and Quantum mathematics all those technological advances will lead to a new generation of military technology our two militaries are vying for military Supremacy who's going to be the most powerful in the most important strategic part of the world which is the Indo Pacific presidents Biden and she met in San Francisco in November in hopes of reestablishing military Communications between our two countries which China had cut off I think we're back to a more settled and stable relationship between the two countries but it's been a roller coaster the low point he says was the Spy balloon incident last year but there's also been the buildup of military bases in the South China Sea the increase of air sorties near Taiwan and the buzzing of US military planes do you see a lowering of the temperature in the South China see no and that's a problem you don't and then on Taiwan following speaker Pelosi's visit we've seen now for 16 months a much higher rate of Chinese both air activity and Naval activity that's very intimidating meant to intimate and that hasn't they haven't pulled back on that and I think ultimately they want to become and overtake the United States as the dominant country globally and we don't want that to happen we don't want to live in a world world where the Chinese are the dominant country when the Cold War ended we all thought our system had won yeah you know their system failed our system rose up now he's come back and said no no the Communist system is the right way I guess we didn't bury that after all you know it's it's interesting to compare the old cold war with this time what distinguishes this time versus the old Cold War Soviet Union had a strong military and nuclear weapons it had a very weak economy which in no way competed with ours China's economy is very strong we're dealing with an adversary a competitor in China stronger than the Soviet Union was in the 1940s 50s 60s 7s and 80s so if that was a Cold War what are you calling this it's a competition of ideas a battle of ideas our idea America's big idea of a Democratic Society and human Freedom versus China's idea that a communist state is stronger than a democracy we don't believe that so there's a battle here as to whose ideas should lead the world and we believe those are American ideas the latest salvos in the battle for Supremacy came last month when China conducted two days of large scale war games around Taiwan and President Biden imposed new stiff tariffs including a 100% tax on Chinese electric vehicles up and get married Leslie stall un witnessing China change while reporting for 60 minutes this was different from the other times I've been there reporting at 60 Minutes overtime.com sponsored by ntek ODT some of the retail the day Russia invaded one of its neighbors waged a bloody war and seized a fifth of that neighbor's territory fear and shock rippled throughout the region we're not talking about Russia's invasion of Ukraine rather the small country of Georgia that invasion was more than 15 years ago Vladimir Putin's Playbook hasn't changed much today Georgia which shares a 556 mile border with Russia is still trying to remove the grip of the Kremlin days after Russia invaded Ukraine Georgia submitted an application to become part of the European Union with hopes of gaining a western insurance policy to protect it last October we met with the president of Georgia Salam zor bash the daughter of Georgian refugees raised in Paris she says that Vladimir Putin has launched a invasion of Georgia in an attempt to extend Russia's reach the war in Ukraine is now moving into its third year how is the war there impacting life here it is of course a reminder of everything that this country has gone through uh and of the fact that it's always uh an immediate uh danger and threat it's uh already part of the the reality that Russia is testing the ground you think the Russians are testing the ground right now in Georgia right now how so here uh their way their easy way uh is the hybrid War a hybrid war that has included online and televised disinformation campaigns and anti-western propaganda pumped into Georgia a favorite tactic of the Kremlin Georgians have seen it before in 2008 three weeks before Russia launched its first air strike in Georgia Moscow hit the country with a series of cyber attacks the five-day bloody battle that followed ended with Russia seizing 20% of Georgia's land president zor bash says the mostly muted International reaction to that war laid the groundwork for Russia's invasion of Ukraine and Vladimir Putin's plan to bring former Soviet republics back into the Russian fold today a fifth of Georgia is occupied by the Russian military and an estimated 8,000 Russian troops are inside the Georgian border we traveled with Georgian Security Forces 37 Mi outside the capital of toi into the Tiny Village of caletti today it is a rural No Man's Land oh my across a rickety Bridge we found an abandoned stretch of Farmland choked off by barbed wire warning sign to stay out oh there she is and a defiant 87-year-old Valia Benes V the Russians have told me this is our land and I said no our land is in Russia This Is Our Land not yours you have no rights here how long have you been surrounded by the barbed wire for 15 years in 2008 her land was seized by Russian troops the grandmother of four still refuses to surrender her home caught up from family she relies on Outsiders and a stick to deliver food and the medicine she needs she whispered to us that the Russians were watching us from over that Hill are you afraid of the Russians yes I'm afraid of them what if they take me and detain me nobody can help me I'm alone when it's only a couple of them I can always answer them and fight back but when it's a lot of them there is nothing I can do Georgia is bordered on the North by Russia the east by azerbijan and the South by Armenia and turkey the bridge between the black and Caspian Sea an important route for natural gas and oil high up in the mountains of Georgia we saw another reason the small country of nearly 4 million is crucial to the Kremlin a long line of Tri many of them carrying European cargo across the border into Russia United Nations data shows that since the War Began everything from Cars to chemicals have rolled into Russia through Georgia some in violation of Western sanctions a Lifeline for Putin's regime there is traffic coming into Georgia too thousands of Russian Nationals entering the country in cars and on foot extending for miles and arriving in waves first at the beginning of the Ukraine war in 2022 and again later that year when fighting age men fled Russia's mandated military service but some Georgians worry Putin loyalist could be entering the country too laying the groundwork for Russia's next move When Vladimir Putin invaded Ukraine in 2022 he said it was to among other things protect the Russians living there president zor bash fears Putin could launch a similar campaign in Georgia since the war Georgia has become home to a 100,000 Russians it's very unnerving when in your own country you have people that are talking the language of the enemy uh and that believe that they're at home the Russians believe that they are at home they're behaving and believing that they are very much at home uh so there's a fine line and that line has to be kept so that we do not have incidents in the future that would allow uh Russia to use their favored doctrine of protecting Russian speaking citizens so why doesn't Georgia just say no more Russians through our border a question for the authorities aren't you the authority no I don't have the executive powers and unfortunately the executive power to control Georgia's border was squarely in the hands of its prime minister Iraqi gabish publicly he said that he supported the country's bid to move away from neighboring Russia and join the European Union but his actions and inactions told a different story since the Ukraine Invasion prime minister gab Bashi agreed to resume flights between tii and Moscow for the first time in almost 5 years he's also failed to adopt strong sanctions against Russia critics of the Prime Minister accuse him of being in the pocket of a Georgian oligarch binaa even vely a billionaire who helped get him elected the 67-year-old oligarch made his fortune in Russia and served a brief stin as georg's prime minister his $50 million home looms over to bisi a reminder of his wealth and power in 2022 European lawmakers called for sanctions against the oligarch for his quote links to the Kremlin a connection that could undermine Georgia's EU bid we're going in with um a government that's completely corrupt a government that's Pro Russian clearly anti-western um clearly does not really care about what the majority of the population wants and needs anad and daim madad are members of the shame movement a group with thousands of young followers working towards Georgia's entry into the European Union if Russia wins it means loss of Freedom loss of everything that we fought for in the past 30 years basically it's a fight for values it's a fight for where you want to stand in this uh big fight for democracy as soon as West in any form be it the US partnership be it European Union is not represented in this country Russia will fill the void right away they say the influx of Russians is already changing the face of Georgia what are they doing if we look at it they're buying Apartments they're buying private property they're opening up businesses um their actions changed uh Georgian economy the Russians are buying Apartments here in every 33 minutes they're purchasing a piece of land in every 27 minutes and they're registering a business in every 26 minutes so I think we're on the brink of very dangerous situation here in Georgia according to public records Russians have registered more than 20,000 businesses in Georgia over the last 2 years and launched five new Russian only schools none of which are licensed by Georgia's Department of Education Russians have driven rent up nearly 130% prices for everything from food to cars have gone up 7% over a 100,000 Georgians have left the country because many of them can't afford to live here anymore I've heard this described as a quiet Invasion quiet Invasion yeah there's a risk of the economic Divergence there's a risk of military intervention and there's a risk of uh Georgia's statehood being destroyed Emanuel LNF George smeno and pel bakov don't look like much of a threat all Russians in their 20s they fled their country for fear of being drafted or imprison for speaking out against Putin they now live in Georgia and work at this russian-owned comedy club in toi I TR said I'm against the war in Russia uh was beaten and uh after that go into prison uh three times so three times you went to jail uh yes yes three times I believe and I know that Russians actually against the war you think that most Russians are against the war yeah just scared really scared have any of you had any aggression towards you because you're Russian actually I have a big writing on the wall it is the biggest thing I see from my window just big Russians go home there is no subtlety in spray paint anti-russian graffiti blankets the city along with support for Ukraine on crumbling walls the Georgian flag is joined with those of the European Union the US and NATO over 80% of the Georgian public backs entry into the EU as does Georgian president zor bash but her position has become increasingly ceremonial as the country moves towards a parliamentary government after she went to Europe to try and pave the way for Georgia Zu bid prime minister aroi gabashvili accused her of violating the Constitution banned her from traveling to Europe and tried but failed to impeach her president zor bash has defiantly continued to fly to Europe to meet with leaders on her own dime it doesn't seem like the prime minister is interested in joining the EU well that's a question that the whole population is asking whether they really want it or whe whether it's s service this is a critical time do you feel like the West particularly the US has been responsive enough and supportive enough of Georgia in this moment I don't think so uh and I would take one concrete example uh I've been a president now for five years uh and I've not managed to have any form of meeting at my level which be be the president or the vice president uh even through a phone call I understand that there are more urgent issues but I think that some more public recognition is needed recognition of of the fact that the United States is supporting our uh candidate status within the European Union I know that that is the language that the US has with our European Partners but that being repeated by at the highest level uh would be uh meaningful for the uh Georgian population the EU has laid out a list of requirements for Georgia to become a full member the conditions include tackling corruption and lessening the economic and political influence of domestic oligarchs membership is not guaranteed what happens to Georgia if the EU denies the bid it would be a big victory for Russia a victory vanes refuses to give them 87 years old she says she is holding her ground for herself and for Georgia that bid may be in further Jeopardy this past February the Georgian Parliament appointed a new prime minister an anti-western member of the Russian leading Georgian Dream party in May his government passed a foreign agents law which threatens to silence media outlets and NOS inside Georgia and just this past week his party proposed legislation that would strip same-sex couples of their rights both moves the EU has said could seriously compromise the country's chance for membership and pull Georgia deeper into Russia's orbit I'm Scott Pell we'll be back next week with another edition of 60 minutes [Music]