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[electronic beeping]

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[static hissing]

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[female narrator] February 1979,

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00:00:14,920 --> 00:00:18,200
and the paramount leader
of the People's Republic of China

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00:00:18,280 --> 00:00:20,120
is taking in a rodeo.

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[crowd cheering]

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Deng Xiaoping is the first Chinese leader

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ever to tour the USA...

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even getting a VIP tour of NASA.

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After 30 years of isolation,

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Communist China is suddenly
back on the international stage.

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And Deng is making it clear

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that they're ready to embrace the world,
economically.

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He doesn't know it yet,

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but that approach will work,

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beyond all expectations.

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The population of China is huge,

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1.4 billion people,

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more than North America, South America,

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Australia, New Zealand,

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Scandinavia, 
and all of Western Europe combined.

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According to the Chinese government,

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nearly 16% of the population

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lives in China's 15 megacities,

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each with a population of over 10 million.

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There are only 47 such cities 
in the world.

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As of 2018, 
China is responsible for 18.6%

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of global gross domestic product.

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It exports 41% of the world's computers,

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34% of all air conditioners,

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and a whopping 70%
of the world's cell phones.

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[ringing]

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China has become 
a global economic powerhouse.

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How did they pull if off?

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And why was the rest of the world 
so slow to notice China's rise to the top?

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[guns firing]

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During World War II,

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China and America are staunch allies

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in the battle 
against Japanese imperial aggression.

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And like America,

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China throws itself into mass production

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on an epic scale.

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[man] Somewhere in China,
a blanket factory in full blast.

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Three thousand women,
working with handlooms,

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weave the blankets for the Chinese Army.

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[narrator] But after fighting
the Japanese,

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China is torn apart by a brutal civil war

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between the US-backed nationalists,

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led by Chiang Kai-shek,

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and the Communist army 
and its leader, Mao Zedong.

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In 1949, Mao sweeps to victory,

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establishing 
the People's Republic of China.

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-[crowd cheering]
-In Mao's China,

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everyone is to share in the wealth.

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-[sheep bleating]
-And that collective community

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will be represented by the state.

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Also, China is to be
completely self-reliant

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-in terms of finance, food, and goods.
-[pig squeals]

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No more stock exchanges

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and no more diplomatic
or economic relations

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with the capitalist West.

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-China, and its 542 million people...
-[crowd cheering]

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...will be cut off 
from the rest of the world.

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[gate clicking, slams shut]

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To modernize 
his largely agrarian mega-nation,

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Mao encourages millions of peasants
to leave their farms

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and work in factories.

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[cheering]

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And to make sure
no one has a problem with that,

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he launches the cultural revolution,

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punishing dissenters by ordering them
to reeducation camps.

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[shouting]

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Paramilitary groups
attack bourgeois intellectuals.

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[shouting]

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Many cities are close to chaos.

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At least a million die.

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[chanting]

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Meanwhile, China suffers
from widespread famine,

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a corrupt infrastructure,

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and a busted economy.

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It's largely ignored
by the rest of the world.

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In 1960,

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China's economy is worth $59 billion...

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a figure dwarfed
by the United States economy,

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worth $543 billion.

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But in the early 1970s,

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America decides it's time to win over Mao,

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taking advantage of a rift

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between him and his Communist counterparts
in the Soviet Union.

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Richard Nixon becomes 
the first American president

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ever to visit China.

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After 25 years of isolation,

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Mao seems prepared
to reestablish ties with America.

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And Nixon hopes to encourage

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an American-style democracy in China.

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[somber classical music playing]

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But when supreme leader Mao dies in 1976,

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his autocratic system
doesn't die with him.

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It just takes a whole new direction.

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Enter Deng Xiaoping.

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When Deng takes China's reins
at the end of 1978,

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he makes it clear that, while his party
is not going to relinquish any power,

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China will consider
opening up to the West

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if they can make a little money out of it.

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This is the reason
for Deng's cheerful visit to America.

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He's sending a signal to the world:

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Communist China is open for business.

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And they start by embarking
on a program of economic reform,

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creating four special economic zones,
or SEZs.

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The zones will be allowed to play
by different rules

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than the rest of Communist China.

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Here, factories will be able
to export goods to the West.

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And importers will be able to trade

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with capitalist countries.

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The idea is that these zones
will draw foreign investment

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and serve as mini economic engines
for the rest of the country.

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And it works...

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spectacularly.

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[man] Just three years ago,

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this area housed a few villages
and paddy fields.

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Today, it is a bustling commercial site,

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an industrial city
being built from scratch.

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[narrator] China's leaders insist 
that these SEZs are just experiments

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in global trade.

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They remain dedicated
to the ideals of Communism and Mao.

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One of the first special economic zones

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is the fishing village of Shenzhen,

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population 59,000.

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By 2016, 
its population swells to 12 million.

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Its GDP per capita

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increases an astounding 24,569%

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Which explains why,
over the next 30 years,

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China will begin designating more and more

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of these development zones.

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By 2005,

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China is constructing neighborhoods
the size of Rome

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every two weeks.

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Between 2011 and 2013,
China uses more cement

139
00:08:04,280 --> 00:08:07,320
than the US did 
in the entire 20th century.

140
00:08:14,960 --> 00:08:17,800
In these early SEZs,

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00:08:17,160 --> 00:08:20,800
factory managers take advantage
of China's massive labor force

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00:08:20,880 --> 00:08:24,360
to crank out huge quantities
of low-cost exports.

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And productivity goes sky-high.

144
00:08:29,840 --> 00:08:32,720
Setting up in the development zone
means tax-free profits,

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low-rents, and endless cheap labor.

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00:08:36,840 --> 00:08:39,880
In one SEZ, Guangdong province,

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one commodity rules them all.

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Toys.

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With more than 1,500 toy factories,

150
00:08:52,400 --> 00:08:56,600
this zone emerges as 
the world's largest toy production base,

151
00:08:56,680 --> 00:08:59,520
exporting billions of dollars worth 
each year.

152
00:09:01,920 --> 00:09:04,400
[man] Anywhere else, 
this is called capitalism.

153
00:09:04,480 --> 00:09:05,640
Here, it's titled

154
00:09:05,720 --> 00:09:08,120
"socialism with Chinese characteristics."

155
00:09:10,560 --> 00:09:13,400
[narrator] Socialism 
with Chinese characteristics

156
00:09:13,120 --> 00:09:15,920
is how China starts fulfilling
huge consumer demand

157
00:09:16,000 --> 00:09:18,400
for cheap goods in the West.

158
00:09:18,920 --> 00:09:21,200
Economically, China's catching up.

159
00:09:21,280 --> 00:09:23,520
But America's still number one.

160
00:09:27,320 --> 00:09:32,800
Between 1980 and 1990,
China's economy almost doubles.

161
00:09:34,200 --> 00:09:35,720
But so does America's,

162
00:09:35,800 --> 00:09:37,200
keeping it far ahead.

163
00:09:42,720 --> 00:09:45,800
But with this opening up to capitalism,

164
00:09:45,200 --> 00:09:47,360
China's leaders now have a problem.

165
00:09:48,360 --> 00:09:50,520
Young people 
are increasingly demanding more

166
00:09:50,600 --> 00:09:53,240
than just the right to pursue profits.

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In the spring of 1989,

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in Beijing's Tiananmen Square,

169
00:09:58,520 --> 00:10:01,240
students begin leading daily protests

170
00:10:01,320 --> 00:10:03,640
calling for democracy, free speech,

171
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and a free press.

172
00:10:05,560 --> 00:10:08,480
But on June 4th, 
the ruling Communist Party

173
00:10:08,560 --> 00:10:10,720
sends the students a clear message:

174
00:10:11,800 --> 00:10:13,120
Economic freedom is one thing.

175
00:10:13,200 --> 00:10:15,760
Political freedom is something else.

176
00:10:16,720 --> 00:10:19,400
Tanks and troops
are dispatched to the square

177
00:10:19,480 --> 00:10:21,880
and open fire on the demonstrators.

178
00:10:22,800 --> 00:10:25,200
[guns firing]

179
00:10:28,440 --> 00:10:31,560
The Chinese government
never does release an official death toll.

180
00:10:32,000 --> 00:10:34,920
But the event
will become known internationally

181
00:10:35,000 --> 00:10:37,320
as the Tiananmen Square Massacre.

182
00:10:38,480 --> 00:10:40,680
[guns firing]

183
00:10:41,640 --> 00:10:43,640
[ship horn blaring]

184
00:10:45,280 --> 00:10:48,600
But while taking a stick
to those protesting their authority,

185
00:10:48,680 --> 00:10:50,440
China's leaders offer a carrot

186
00:10:50,520 --> 00:10:52,440
to those interested in making money.

187
00:10:53,200 --> 00:10:54,280
[overlapping chatter]

188
00:10:54,360 --> 00:10:56,200
In December 1990,

189
00:10:56,280 --> 00:10:58,720
they reopened the Shanghai Stock Exchange,

190
00:10:58,800 --> 00:11:01,000
sparking stock market fever.

191
00:11:01,680 --> 00:11:02,720
Money, money, money!

192
00:11:02,800 --> 00:11:05,280
[man] Shares are on offer, 
and for the Chinese,

193
00:11:05,360 --> 00:11:07,160
it's a riveting new game.

194
00:11:07,920 --> 00:11:10,280
It's a chance to be a real capitalist.

195
00:11:11,120 --> 00:11:13,320
[narrator] 
China's still a Communist nation,

196
00:11:13,400 --> 00:11:15,800
but its transformation to a market economy

197
00:11:15,880 --> 00:11:17,400
seems almost complete.

198
00:11:18,200 --> 00:11:20,600
I dream of money, money. Yes.

199
00:11:20,680 --> 00:11:22,440
-[woman laughs]
-Owning money.

200
00:11:22,880 --> 00:11:26,160
Getting money.
I'll be millionaire very soon.

201
00:11:26,240 --> 00:11:27,200
[laughing]

202
00:11:28,840 --> 00:11:30,400
[narrator] What would Mao say?

203
00:11:36,160 --> 00:11:37,960
By the end of the 1990s,

204
00:11:38,400 --> 00:11:41,320
the signs of China's economic success
are everywhere.

205
00:11:43,200 --> 00:11:45,960
Memories of the civilians
killed in Tiananmen Square

206
00:11:46,400 --> 00:11:48,320
and the freedoms they were seeking
seem to fade,

207
00:11:48,920 --> 00:11:51,960
as workers' wages
and their quality of living climb.

208
00:11:54,160 --> 00:11:56,280
And foreign businesses
rush to set up shop

209
00:11:56,360 --> 00:11:58,400
to reach China's billions of consumers.

210
00:11:59,840 --> 00:12:01,400
[engine revving]

211
00:12:01,120 --> 00:12:02,000
[speaks Chinese]

212
00:12:03,440 --> 00:12:05,200
Luxury items from abroad

213
00:12:05,280 --> 00:12:07,840
become highly-coveted status symbols.

214
00:12:08,440 --> 00:12:09,320
[horn honks]

215
00:12:12,360 --> 00:12:14,360
But most Chinese citizens can't afford 

216
00:12:14,440 --> 00:12:17,160
expensive name-brand goods from overseas.

217
00:12:18,520 --> 00:12:21,360
A massive demand
for counterfeit goods emerges,

218
00:12:21,800 --> 00:12:25,160
one that fuels a new boom
for China's manufacturers,

219
00:12:25,240 --> 00:12:28,800
accounting for up to 8% of China's GDP.

220
00:12:29,880 --> 00:12:32,120
Okay, so here we have the new Bond DVD.

221
00:12:32,200 --> 00:12:34,440
In fact, we have
the whole Bond series here. 

222
00:12:34,520 --> 00:12:36,160
And this is just the tip of the iceberg

223
00:12:36,240 --> 00:12:38,680
when it comes 
to China's counterfeit culture.

224
00:12:40,120 --> 00:12:42,840
[man] Sometimes it feels
like everyone's faking it.

225
00:12:42,920 --> 00:12:45,000
Polo shirts, Burberry scarves.

226
00:12:45,800 --> 00:12:47,120
No Western brand is safe.

227
00:12:49,560 --> 00:12:51,960
[narrator] Soon, fake Chinese-made goods

228
00:12:52,400 --> 00:12:54,240
are finding their way around the world.

229
00:12:55,680 --> 00:12:58,280
And sellers of the real stuff 
aren't happy.

230
00:13:00,120 --> 00:13:04,280
[man] This Chinese chocolate maker
is being sued by its more famous rival.

231
00:13:04,680 --> 00:13:06,120
Ferrero Rocher complained

232
00:13:06,200 --> 00:13:08,840
the product is too close for coincidence.

233
00:13:08,920 --> 00:13:10,240
This is Chinese name.

234
00:13:10,320 --> 00:13:12,320
-This product is made in China.
-Uh-huh.

235
00:13:12,400 --> 00:13:13,480
-This, no.
-Uh-huh.

236
00:13:13,560 --> 00:13:15,200
This is just an English name.

237
00:13:15,280 --> 00:13:16,800
-This is Chinese name.
-Uh-huh.

238
00:13:19,560 --> 00:13:21,720
[narrator] The thing is, 
China really wants

239
00:13:21,800 --> 00:13:23,680
to join the World Trade Organization

240
00:13:23,760 --> 00:13:26,520
to solidify its status on the world stage.

241
00:13:28,760 --> 00:13:30,680
[applauding]

242
00:13:30,760 --> 00:13:33,360
And it has
President Bill Clinton's support.

243
00:13:34,200 --> 00:13:36,400
Opening the economy of China,

244
00:13:36,120 --> 00:13:38,720
the agreement will create
unprecedented opportunities

245
00:13:39,200 --> 00:13:42,000
for American farmers, workers,
and companies

246
00:13:42,360 --> 00:13:44,760
to compete successfully
in China's market,

247
00:13:45,160 --> 00:13:48,400
while bringing increased prosperity
to the people of China.

248
00:13:50,000 --> 00:13:53,360
[narrator] But those counterfeit goods
become a real sticking point.

249
00:13:54,880 --> 00:13:57,320
America insists that China's leaders

250
00:13:57,400 --> 00:13:59,720
crack down on copycat manufacturing.

251
00:14:00,680 --> 00:14:02,520
[applauding]

252
00:14:02,600 --> 00:14:04,360
And China swears it will.

253
00:14:07,480 --> 00:14:09,360
But as of 2019,

254
00:14:09,440 --> 00:14:13,560
it's estimated that 85%
of all the world's counterfeit goods

255
00:14:13,640 --> 00:14:15,400
still comes from China.

256
00:14:16,640 --> 00:14:19,640
Second place goes to Turkey, with 3%.

257
00:14:21,400 --> 00:14:22,960
China's top five counterfeit goods are...

258
00:14:23,400 --> 00:14:24,480
-[ringing]
-...smartphones,

259
00:14:25,320 --> 00:14:26,880
luxury brand bags...

260
00:14:26,960 --> 00:14:28,680
-[footsteps]
-...footwear,

261
00:14:29,760 --> 00:14:32,960
sports clothes like Nike and North Face...

262
00:14:33,880 --> 00:14:36,800
and it's estimated that 20% of cosmetics

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00:14:36,880 --> 00:14:39,120
on the market in China are fake.

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[glass shattering]

265
00:14:44,840 --> 00:14:46,800
In the 1990s,

266
00:14:46,160 --> 00:14:48,200
the rest of the world also wants China

267
00:14:48,280 --> 00:14:50,240
to open up its state-controlled markets

268
00:14:50,320 --> 00:14:52,800
to more competition from outside.

269
00:14:54,480 --> 00:14:56,520
They say it's not fair
the Chinese government

270
00:14:56,600 --> 00:15:00,000
blocks imports into China
but still floods other countries

271
00:15:00,800 --> 00:15:01,320
with its exports.

272
00:15:03,800 --> 00:15:05,920
Again, China promises

273
00:15:06,000 --> 00:15:07,920
to work towards balancing its trade.

274
00:15:09,800 --> 00:15:12,160
And in November 1998,

275
00:15:12,240 --> 00:15:16,480
America agrees to support China's entry
into the WTO.

276
00:15:16,560 --> 00:15:18,800
[cheering, applauding]

277
00:15:20,640 --> 00:15:24,280
Earlier today, the United States and China
reached an agreement

278
00:15:24,360 --> 00:15:25,680
on the WTO.

279
00:15:26,160 --> 00:15:28,520
This is a truly historic achievement.

280
00:15:30,400 --> 00:15:32,360
[narrator] Clinton, like Nixon before him,

281
00:15:32,440 --> 00:15:35,160
hopes that 
Beijing's authoritarian government

282
00:15:35,240 --> 00:15:37,360
will loosen its grip over its people

283
00:15:37,440 --> 00:15:40,120
once it opens up to doing more business
with the West.

284
00:15:41,400 --> 00:15:42,680
But that rosy-eyed optimism

285
00:15:42,760 --> 00:15:46,280
may be what blinds foreign powers
to the aggressive juggernaut

286
00:15:46,360 --> 00:15:48,400
China's economy is becoming.

287
00:15:50,680 --> 00:15:52,240
By 1998,

288
00:15:52,320 --> 00:15:55,480
China's economy hits the $1 trillion mark.

289
00:15:56,760 --> 00:15:58,920
But America is still way ahead,

290
00:15:59,000 --> 00:16:01,800
hitting $9 trillion.

291
00:16:09,320 --> 00:16:13,280
Then, in 2008,
an economic crisis hits.

292
00:16:13,360 --> 00:16:19,280
And this one is global,
the worst economic disaster since 1929.

293
00:16:20,760 --> 00:16:25,360
In the US, more than 2.6 million people
lose their jobs,

294
00:16:25,440 --> 00:16:28,320
1.8 million businesses shutter,

295
00:16:28,400 --> 00:16:32,680
and 10 million homes
are foreclosed in less than two years.

296
00:16:34,480 --> 00:16:36,880
That December, China is hit too,

297
00:16:37,560 --> 00:16:39,840
as exports to the US dry up.

298
00:16:40,680 --> 00:16:43,360
People just aren't buying
like they used to.

299
00:16:45,240 --> 00:16:47,480
[automated voice] Ho, ho, ho-ho-ho-ho!

300
00:16:47,560 --> 00:16:49,440
Merry Christmas!

301
00:16:49,520 --> 00:16:51,800
[man] It's no laughing matter.

302
00:16:51,160 --> 00:16:53,320
Someone canceled Christmas,

303
00:16:53,640 --> 00:16:56,520
as China discovers that all that glisters

304
00:16:56,600 --> 00:16:58,440
is no longer sold.

305
00:16:58,520 --> 00:17:00,520
[crowd clamoring]

306
00:17:01,840 --> 00:17:04,400
[narrator] Many Chinese factories 
shut down,

307
00:17:04,480 --> 00:17:08,760
including one mega-factory
that produces the symbol of the season.

308
00:17:08,840 --> 00:17:11,600
[man] 
The world's largest Christmas tree factory

309
00:17:11,680 --> 00:17:12,680
lies derelict.

310
00:17:13,880 --> 00:17:17,880
All around here, you will find
dozens of factories like this,

311
00:17:17,960 --> 00:17:21,520
that have collapsed under the weight
of empty order books,

312
00:17:21,600 --> 00:17:24,800
an empty and rusting reminder

313
00:17:24,160 --> 00:17:25,960
that, in the global economy,

314
00:17:26,400 --> 00:17:29,600
the global downturn knows no boundaries.

315
00:17:33,360 --> 00:17:35,240
[narrator] But remember, in China,

316
00:17:35,320 --> 00:17:37,160
the state runs everything.

317
00:17:37,440 --> 00:17:41,680
And China's new paramount leader,
Hu Jintao, isn't worried.

318
00:17:42,240 --> 00:17:46,000
They'll just use the state's deep pockets
to make up for any losses.

319
00:17:46,800 --> 00:17:48,200
[in Chinese] In order to develop 
a political system

320
00:17:48,280 --> 00:17:50,960
that is socialist and democratic,
we have to continue with the policy

321
00:17:51,400 --> 00:17:53,240
of socialism with Chinese characteristics.

322
00:17:53,560 --> 00:17:56,280
[narrator] With no free press 
or political opposition

323
00:17:56,360 --> 00:17:58,280
to second-guess their policies,

324
00:17:58,680 --> 00:18:01,240
the Chinese government swiftly authorizes

325
00:18:01,320 --> 00:18:04,680
a $586 billion bailout.

326
00:18:06,520 --> 00:18:07,640
And Chinese factories

327
00:18:07,720 --> 00:18:10,680
quickly pivot from churning out
goods for export

328
00:18:10,760 --> 00:18:13,440
to making goods for domestic consumers.

329
00:18:14,760 --> 00:18:17,680
For China, the crash of 2008

330
00:18:17,760 --> 00:18:19,880
turns out to be less of a knockout

331
00:18:19,960 --> 00:18:21,440
and more of a glancing blow.

332
00:18:22,560 --> 00:18:24,960
Soon, they're ready to rise again.

333
00:18:30,240 --> 00:18:32,560
Using its newfound economic leverage,

334
00:18:33,400 --> 00:18:36,920
China starts quietly investing
in far-flung developing nations

335
00:18:37,000 --> 00:18:38,880
in Africa and Asia.

336
00:18:43,520 --> 00:18:45,400
One of the most ambitious policies

337
00:18:45,480 --> 00:18:47,880
is called the Belt and Road Initiative,

338
00:18:49,000 --> 00:18:52,160
a vast series of infrastructure projects
around the globe.

339
00:18:57,440 --> 00:18:59,960
These include a 12,000-kilometer railway

340
00:19:00,400 --> 00:19:03,400
stretching from Yiwu in coastal China

341
00:19:03,120 --> 00:19:04,600
all the way to London...

342
00:19:06,960 --> 00:19:08,400
a massive network of highways

343
00:19:08,480 --> 00:19:11,960
connecting Eastern China
to Pakistan's deep-water ports...

344
00:19:15,600 --> 00:19:19,120
and a 1,833-kilometer pipeline

345
00:19:19,400 --> 00:19:22,240
that can carry natural gas
from Turkmenistan

346
00:19:22,320 --> 00:19:25,400
across Central Asia to the Chinese border.

347
00:19:25,920 --> 00:19:28,320
Around the world, China has invested

348
00:19:28,400 --> 00:19:31,480
more than $1 trillion
in infrastructure projects,

349
00:19:31,560 --> 00:19:33,480
across dozens of countries.

350
00:19:39,400 --> 00:19:40,960
[fanfare playing]

351
00:19:41,400 --> 00:19:44,440
This latest strategy 
of China's newest leader, Xi Jinping,

352
00:19:45,400 --> 00:19:47,960
really makes the West sit up
and take notice.

353
00:19:48,560 --> 00:19:50,480
Is China taking over the world?

354
00:19:51,400 --> 00:19:52,400
[speaking Chinese]

355
00:19:52,480 --> 00:19:54,800
[crowd chants in Chinese]

356
00:19:56,920 --> 00:20:00,400
Supporters 
of China's international investments

357
00:20:00,120 --> 00:20:02,800
say that these infrastructure projects

358
00:20:02,160 --> 00:20:04,600
will lift millions of people
out of poverty

359
00:20:04,680 --> 00:20:07,440
and create jobs in poorer countries.

360
00:20:10,280 --> 00:20:12,360
Critics say it's a land grab,

361
00:20:12,440 --> 00:20:14,800
using checkbooks instead of swords.

362
00:20:15,800 --> 00:20:19,280
Either way, it's increasing
China's overall wealth

363
00:20:19,360 --> 00:20:20,920
at an astronomical rate.

364
00:20:24,880 --> 00:20:26,800
By 2018,

365
00:20:26,320 --> 00:20:29,400
China's economy
is closing in on America's.

366
00:20:29,680 --> 00:20:31,280
It's not a matter of if,

367
00:20:31,360 --> 00:20:34,120
but when China overtakes the US.

368
00:20:36,800 --> 00:20:38,800
The best guess is by 2025,

369
00:20:39,880 --> 00:20:43,280
making China the world's number one 
economic superpower.

370
00:20:48,360 --> 00:20:50,400
Less than 50 years ago,

371
00:20:50,120 --> 00:20:53,720
Nixon saw China
as a struggling third-world country.

372
00:20:54,440 --> 00:20:57,240
Today, it's China
that the rest of the world

373
00:20:57,320 --> 00:20:58,960
is playing catch-up to.

374
00:21:01,000 --> 00:21:04,600
Most will agree  that their brand
of state-sponsored capitalism works

375
00:21:04,680 --> 00:21:06,520
when it comes to making profits,

376
00:21:06,920 --> 00:21:09,960
perhaps even better 
than America's messy democratic system.

377
00:21:12,000 --> 00:21:14,400
But history tells us

378
00:21:14,120 --> 00:21:18,160
nations are not built on economic success
and power alone.

379
00:21:19,160 --> 00:21:21,640
So how will China survive long-term?

380
00:21:22,960 --> 00:21:24,640
Will people demand more choice,

381
00:21:25,200 --> 00:21:27,160
more say in their own government?

382
00:21:28,120 --> 00:21:29,240
Whatever its future,

383
00:21:29,960 --> 00:21:33,600
it's safe to say
no one is ignoring China anymore.

384
00:21:37,840 --> 00:21:39,840
[percussion music playing]