2 million people. they need to deploy a lot of medics. we understand 15,000 medical teams are deployed, and they hope that the hajj season will go smooth and well. >> and you can find out much more on our website www.aljazeera.com. >> it's a week of big visits. the leader of one fifth of the world's people, xi jinping has arrived on the world trade center, and the leader of one fifth of the world's people, pope francis, is on the east coast. we'll look west to east, and america's complicated relationship with an ambitious world power. it's the "inside story."

welcome to "inside story." i'm ray suarez. xi jinping, the general secretary of the communist party of china is 62 years old. he has been a party function airy of run kind or the other through much of his life. and he has seen his country come from famine to underperformer, to a country that has a lot to say about the security for the whole world. so his country's lil and economic interests. allen schauffler reports. >> through our country, every day, flows 1 and a half billion dollars in goods and services,

and that depends on our trade with china, and it has grown astronomically. >> xi is having dinner with bill gates, and tech firms are looking for assurances that they can do business fairly with contain. without government interference. >> obviously, cyber security, and playing fields for america and china, and discrimination of foreign firms, as well as the lack of a rule of law. and inadequate protections of our intellectual property and trade secrets. >> xi is the fourth consecutive chinese leader to visit the u.s. dudley sees the area as a natural stop over. >> we to the encourage entrepreneurs to build

companies not only that thrive in china, but internationally. when you look at starbucks and boeing. >> it will likely be a soft landing in the west, before more substantive talks, and a harder line and a higher level back east. >> we're preparing a number of measures that will indicate to the chinese that this is not just a matter of us being mildly upset, but is something that will put significant strains on the bilateral relationships. >> so i think it's a good cop, bad cop situation, where we can play good cop here, and talking about entrepreneurialism, and trade relationships, and hopefully obama is going to play the bad cop. >> the visit comes at a time when china is flexing it's military muscle and trying to solidify territorial claims in the south china sea. those issues, along with cyber security and afraid, all expected to be on the agenda

when the two presidents meet. >> joining me now, graham webster, carol mcgifford, dr. eo of the 1,000 stronging foundation, and former adviser to the civic affairs at the u.s. state department, and gordon chang, the author of the coming collapse in china, and the contributor for forbes be.com. graham webster, let me start with you, and let's start with your description. and i'll get it from all you have our guests, of the state of play in the bilateral relationship between china and the u.s., and how are things looking on the eve of the meeting between xi and president obama? >> well, the basic relationship of the u.s.-china relationship is not actually substantially different than it has been for years. we have a number of differences and a number of commonalities, and overall, the number of

commonalities, especially in the economy, are the undergird of this relationship. but in the united states, and to some extent in china, the feeling has been that relations are getting worse, and we're seeing a lot more trouble and skepticism on issues like cyber security. >> carol mcgifford, are these things that can be worked out? the economy headline this week was nothing to smile when. >> this is undoubtedly a tense and tough time in the u.s.-china relationship. and there are various challenge that's we're facing with china that will be discussed in the upcoming obama/xi visit. and status quo, the anxiety and the tension of the relationship is what we'll see for the foreseeable future. and what we need to do is manage that, and figure out how to work with china in areas where we have shared interests, and manage the issues and the

challenges where we disagree in a way that doesn't boil over. >> gordon chang, do you agree that it's going to being tension for the foreseeable future? >> well, there will be tension, but i think this is a good thing, because we're no longer trying to shuffle off to the side those issues that are of importance where we disagree. we're confronting them, and i think it's a good thing. i don't think that china is a rising power. you look at its economy, growth in the low single digits, and a plunging stock market. and you have money coming out of this country at unprecedented rates. $135 billion a month, according to china's leading data provider, so i think we're going to see a very different china landscape, and all of things that we think we know about china at this time are going to be okays sleet, maybe a year from now. >> gordon chang, why are we seeing a rollout?

21-gun salute. and it state dinner, president obama could have waited until the end of the week and headed out to redmond, washington and met xi jinping there. >> i think that it was appropriate to it accord the state status. 21-gun salute. and what we're doing is le legitimize the commofnist party. he wants to rebuild that party and he wants their money. i don't think that he's coming to washington to make terms with president obama or agree on the matters, but he's there because he wants all of the televised images of the pomp and pageants tree. so i think this is a mistake on the part of the administration, but they're inheriting it, and we're going to see that their china policies are not working

and see newpologistses soon. because what we're doing is not pushing china in the right directions. >> it seems that some of these are long-standing issues, and they don't change of, no matter the tough talk that goes on between the two countries. >> i would first say that i welcome president xi to washington finish a state visit. and these are important opportunities for both sides to show the value that they place on this relationship. and the president is personally invested in the future. and yes, there are challenges today and tomorrow. but the solution is not to just engage in tough public talks, to get our leaders at all levels of government to hash out solutions. that doesn't mean that we're going to see the two presidents walk out hand-in-hand, but it does mean that both sides are taking these issues very seriously, and looking for ways in which we can find common ground, and where we can't. and where the interests are in

juxtaposed positions and where we go from there. >> is respect necessarily approval? >> not necessarily. china, as the second large ost economy in the world, as a major global power, a country that we need to work with and collaborate w. with some of the biggest issues like climate change, deserves the respect that the white house will be giving president xi this week. >> when chinese leaders come to the u.s., it's plenty of unsolicited advice. what to talk to the leader about. climate change? security? what are the biggest pending issues in the economies. xi comes to america, it's the "inside story."

>> you're watching inside the reef, and i'm ray suarez. with legendary columnist, 1.4 billion chinese, and we fly to the world to meet the giant of the economy. you get to washington, you shake his hand and the doors close behind and you then what? she comes to america, and gordon chang, what are the largest pending issues, the

must-dos on the two president's lists? >> . >> everyone talks about chinese hacking that is used for commercial purposes, and then we have the china sea, where they're trying to close off global conflicts, and in 2012 from the philippines, an acts of aggression, and you have china support for russia in the sanction busting activity. and you go down the list, and there are so many issues that should be discussed and i don't know if all of them will be covered at this time, but clearly, cyber is going to be the one that's attracting president obama's attention at this point. >> pole stores asked americans what they think that the biggest problems are, and surprisingly, cyber came up very high on the list. the chairman addressed it at the beginning of his trip.

>> . >> cyber and hacking are crimes that should be punished with international treaties. >> graham webster, whenever you lay this charge against china, the chinese respond, hey, the americans are doing it to us every day as well. fair response? >> well, the u.s. response is that look, the united states does spy internationally, and there's no way to avoid that. what the u.s. government says, it does not spy on foreign corporations and then hand over parallel property and other sort of competitive secrets to american companies. so what you really see in the cyber security issue is actually two or more issues. on the other hand, you have the commercial hacking, and this is something that the u.s. is really trying to push china on, and i think that they're going to continue doing so in washington this week. on the other hand, you have

strategic issues, things that could get us into military trouble, or could really cause an escalation in the time of crisis. and something that the two governments are talking about. potential accord on this, and if they were to go forward on that, who knows what would come out of it, but they need to work on both of these issues. >> businesses, leaders of major cabinet he departments, raise issues like these with their chinese counterparts. and give some words in response, and then the ball doesn't move. the situation doesn't change. china answers the charges. and we just sort of move on from there. though we haven't changed much. >> i think in all relationships, particularly at this level, the negotiation

often starts when the agreement is signed. so i do think that there are opportunities, even whether it's an arms control agreement on cyber security, but once those measures are agreed to, there's a series of steps that both sides need to take to make sure that they're implemented enforce. so i'm not sure that i would characterize it the way you did. which sucks that it's all for show, but i think it's the beginning of a long process of these issues on all levels. >> i say that because in case after case, whether it's building up sandbars into islands, and putting military facilities on it, drawing new lines in the south china sea, or continuing, a response is made, a denial is made. and those things continue happening. it's not like these sand bars, there's some sort of a pause that's going on while the world

hashes this out, it's going on apace. >> absolutely, and i don't mean to suggest that it's not incredibly a challenge. there are new conversations between the governments that have changed the nature of what china is doing in the south china sea. but more importantly, frankly, how is the united states going to manage the situation if we're not going to be able to change china's behavior in certain areas that feeds our interest, how are we going to manage it? last night in seattle, president xi talked about taking steps to make sure that we're reading each other's intentions correctly. and i think that is what has a lot to do with it. so we understand deeply the intentions behind each other's actions, and there leaves had a lot of room for mistrust. >> when we come back, is china growing into its shoes? it's a formidable executor, a

prodicious partner, and is china stepping dramatically with its neighbors?

>> welcome back to "inside story." i'm ray suarez. after meetingsing with the leaders of some of the world's most important corporations on the u.s. west coast, chinese communist party chairman, xi jinping heads to washington d.c. to talk to president obama. exports that china has devalued. and in the u.s., china has to work with its own interests, but has to balance that with interests and responsibilities elsewhere in the world. does china? gordon chang, and mcgifford and graham webster are with me. and graham, when you look at the paris chime at conference that's upcoming, and talks with iraq, which china was part of, and the creation of the bricks

bank, was china a full partner, a guiding partner that's in some ways is commensurate with its size and the size of the economy? >> i don't know how you measure that, but i think that china's government is making a real of effort to increase its power and leadership capabilities around the world. i think in the case of the u.s.-china agreements on climate change, if we have a breakthrough at the paris climate conference, it's going to be partly because of these two countries. on the iran deal, i think that we have serious cooperation between the u.s. and china, even amidst a lot of differences, and they're moving toward full implementation of the deal. that's president xi jinping's quote. so i think that china is trying to take a leadership in some of its own interests. the u.s., in international institutions, often pushes for

arrangements that benefit the united states and it's allies. these things are in a way comparable. and i think as humans on earth we should sort of sign-off on our nationalities for a moment and see who's doing the best job, and it's going to be a mixed bag. >> caroline, is china growing into its shoes? >> i think that it's working hard to, and as many of these things evolve, i wouldn't under stim the importance of these decisions and how they play on the domestic front. i think a lot of the economic and the other decision that's president xi is making is really based on helping to consolidate his power at home. and therefore, viewing it through that lens, as graham would say, it's a very natural instinct to be taking somebody's policies, even if they're not in their best interest, and that's where we come in, standing up for the global economy and the united

states. >> the book, china's coming collapse, are we dealing with peak china in 2015? >> i think that china has already peaked. it's economy is plunging toward contraction, and xi jinping talked about today, we're managing this, but when you look at what they have done over the last year, all of their tactics to stimulate growth have failed. and the one thing that they could do to create a new round of expansion is something that's politically impossible, and that's structural economic reform. xi jinping's idea of change is very regressive, going back to the economy, and this is going to be extremely bad for china. what we're seeing now, is the failure in the economy, which is important, because the economy was a motor of the country's rise for 35 years, and i think that it's going to be the engine of the fall. and i think that the best that the chinese can do is two

decades of stagnation, and it's going to be a very different china going forward. >> caroline, how about that? the government points out the tools in the tool kit when you're acosmnist economy, that can't respond like other countries do with worldwide systemic problems. >> i'm not an economist. so i can't go into that. but this is not an issue that we can put on the chinese plate. our economies are inextricably intertwined so. the more they try to generate the demands and mosque to an export driven economy is in our interest, so with the strategic dialogue, so we can be the partner to the extent possible to help the chinese figure this out. >> gram webster, average

chinese on the street, we're talking to reporters about how state information organs, and government controlled newspapers were urging people to buy, even as the stock market was on the precipice of a big, big shedding of value. and is this the kind of thing that's going to happen in a country that's trying to be capitalist and command and authoritarian controlled at the same time? >> well, i also have to say that i'm not an international economics expert. >> but you have a 401k plan. >> maybe not big enough. but what i think you need to look at the fact that the chinese communist party, and the chinese government have a strong governing hand of their economy, and in some ways, and in a lot of ways, it's a capitalistic economy that moves with the markets.

the stated goal for a lot of sectors is to make the market the decisive principle in the economy, and as the government tries to find balance doing that, sometimes they're going to intervene, and sometimes let go. some analysts think that they should have let the stock market collapse, eliminating the 401ks for a lot of chinese citizens, and what we see, the decision makers in beijing didn't see that acceptable. >> i want to thank my gifts. graham webster, caroline mcgifford, former adviser to the east asian and pacific fairs, and gordon chang, author of the coming collapse of china and contributor to forbes.com. i'll be back in a moment with a final thought on xi jinping. stay with us, this is "inside story", and send us your

thoughts on twitter. or follow my and get in touch at ray suarez news. or follow our facebook page, and tell us what you think about the state of relations between the u.s. and china. we would love to hear it.

>> being mad at china for trying to dominate markets and competitors, is like blaming man-eating sharks for eating fish, it's what they do. and worldwide markets for centuries. cheating at it wasn't invented by the chinese either.

but in the 21st century, there are rules to try to keep rough order in the way that countries relate to each other. how they contend and compete and pushup against each other. and one of the things with relations, is the chin out, muscular bluff. does china really believe that it's international borders extend up to the beaches of the philippines? do they believe that you can put in landfill and put bunkers on sandbars and that represents the new chinese border that the rest of the world has to recognize? maybe they do and maybe they don't, but they have learned quickly in the years since they stepped out onto the world stage that acting like you believe it is half of the battle. china has played a strong hand. it has made hands with the developing countries of the world. and it has helped countries around the world get rich fast. do me a favor. let's not pretend that china is not the first power that tried

it throw it's weight around. just the newest. i'm ray suarez, and that's the "inside story." >> this is aljazeera america, live from new york city, i'm erica pitzi. a holy communion, thousands joan pope francis in washington d.c. as he celebrates mass for the first time in the united states. another bump in the road. the ceo of volkswagen resigns, but takes responsibility for the company's emission cheating scandal. and emergency meeting. eu leaders