>> from our studios in new york city, this is "charlie rose." charlie: graham alice son is a professor at the kennedy school at harvard. can america and china the trap. he examines the potential for conflict as china threatens to displace america on the world stage. m pleased to have graham alison. when did you first know that this was a subject that needed attention? > probably a decade ago, henry

kissinger was my professor and a book that i published three, four years ago. these are i think two strategic thirst of our lifetime. and they kept reminding me about the soviet union and nuclear weapons, think about china. i started study china about 10 years ago and five years i stumbled on this idea, when a rising power threatens to displace a ruling power, bad things happen. and that as a lens helps you look through the daily noise and news to see a primary dynamic here and helps us recognize the dangers that are inherent in such a situation. charlie: this is "the financial

times" from today. china's president makes his way to the podium in the great hall of the people in beijing to deliver an hour-long speech that warned that china's neighbors that the country would not tolerate any infringement of its territory. warned that china would not tolerate any infringement of its territory. >> he was just coming from spending the weekend with the p.l.a. at their -- charlie: people's liberation army. > and had a celebration of the people's liberation army and the exercises were playing against the so-called blue team that was looking a lot like us. charlie: what do you think the chinese mind is about what they want to do? >> i think it's very clear. long before donald trump sounded

his banner, xi's objective is to make china great again. he calls it the great rejufe nation of the great chinese people. in his story, china was the great country for 5,000 years. 200-year intermission when the west exploited them. but china is growing stronger. charlie: they want to be great on their own terms and not what is part of what the west created. >> correct. china wants to be accepted as china and not as an honorary member of the west. charlie: what does that mean because many people will argue with you that china doesn't have global ambitions, its history, nor its intent. imperial is particular power. >> you have two fundamental points.

with respect to its ambitions for the time being, it's right to say they would like to be the predominant power in the western pacific, which means not seeing the u.s. navy as the arbiter of events in the south china sea determining who should be building an island or owns an island. they look like teddy roosevelt looked at the car bear. charlie: other people claiming parts of those islands are not the united states. >> we are not claiming. but we are claiming we have a say in what's going on. when the british and germans wanted to have a say in a territorial dispute in venezuela. roosevelt said, either have a war with us or butt out. in our hemisphere we thought we should be determined how these things are adjusted. from their point of view as great china historically did not

have some other great power there helping determine who owns an island or who builds an island or what goes on. to your second point, the chinese imperialism is not of territorial occupation. they just want you to be states who give deference and respect. charlie: in their region or beyond their region? >> it's things they can see initially. ain, i think -- i bet if president xi were talking, sign up to the second centennial which is 2049, we just want to be a great power in our region. we don't have ambitions to be in europe. charlie: you think that might change? >> well, the competent is in 50

years if i become the predominant power in asia, will my horizon expand? maybe, maybe not. compared to everything it could see. but it couldn't see things that were very far away and i don't think it has any territorial ambitions but it does have ambitions to be debate and have thers be defer enshal. cheal charlie -- charlie: the number of projects it has in pursuit of minerals and pursuit of relationships on different continents around the world, africa, latin america, the trade with latin america. >> absolutely. it's a stream to the resources and continuing their supereconomic growth and building up. i think again historically, if all i want to do is secure my lines of communication and all i

want to do is secure my access to resources, that in the japanese case led ultimately to an engagement and fighting about that and indeed basically -- i don't think most of the chinese fellows i know don't see china developing a desire to want to occupy other people's countries, but they do want to have a say and have a substantial say. nd the closer it is to them. charlie: how do you compare the president of china to previous leaders of recent history? >> i was in beijing two, three weeks ago and the chinese, i try to ask them a question like that and listen around the edges. clearly, he is not like any other leader and now people are ying, -- they call him the

c.e.o. or chief of everything and he has all the lines running to him. charlie: including the military. >> everything. basically, tao is not a comparison. e only comparison is ping or mao. he has declared himself the core leader and they may even elevate him to another level at this party congress coming up in november. charlie: one of my wonderful and talking about ping and what he was doing in singapore and sent 200 chinese to go to singapore and observe and come back so whatever revolution they were going to take on in china, they would know what he had done. >> absolutely.

yu and the interviews you did with him are helpful and why he is so relevant. yu felt himself to be half chinese but he cared about singapore and trying to make singapore to survive. he wanted to know what was going on next door in china. and the chinese saw these chinese guys making a very successful society in singapore, how does this work. yu talked about the black box, ke the westerners -- yu said no, you have private property and economy and that's how it works. every one of these leaders called yu, mentor. he spent thousands of hours with these people talking face to face. and you ask what he wanted, it's not coming up with a theory of

the case. charlie: he understood power more than democracy. >> way more. there is a funny story when i got to know him initially became a fellow at the institute of politics at harvard and took timeoff. this was in the late 1960's. every time we would come away with 1,000 good ideas. and one time he called me up and id i'm talking about sending my son there. i said that's great. he said, he wants you to take care of him and make sure he learns everything. ut don't talk to him about democracy. [laughter] charlie: what's interesting to me is how the chinese see the

united states. do they respect us, do they not respect us or look at the things we have accomplished both in terms of our universities, in terms of our technology, in terms the success of our economy and do they say, there's a lot to be admired and some things to be copied? >> they think america is a superpower and how it could become such a successful society. they can copy and steal what they can steal and emulate what they can emulate but don't want to become americans and don't want to have our system. charlie: what is the thing about us they don't want to be? it was said after the collapse in 2008, and the economic ollapse we had in 2008 -- we don't necessarily think you are doing it right? >> 2008 was a big event for them n the financial domain where they talked about capitalism,

wall street, you know about financial markets. you must know some magic of financial markets. and when there was a collapse, they came to conclude, maybe the teacher doesn't know the answer. in their system, they believe you have more control of everything. ping is not going to relax capital markets because he is afraid of what the consequences would be. they aren't prepared for their market economy and have national champions which the government supports. every day you pick up the paper and see, here they are trying to build chips and semiconductors so they can compete. there was a time when germany was the place that built high-speed rail. they built some in china. they require the technology and steal the ress. now china builds the high-speed train. they are predatory in learning

from somebody who has been successful in every area. but when it comes to government and politics, they watch the u.s. in the 21st century and they say, would anybody try to emulate that system? we are of pragmatism and not ideology. we've got what works and a system in which the leaders get to be leaders by being tested at many levels. so we are quite happy with our system, thank you and not trying to sell it to you or tell other people what they should do but we are telling you we aren't interested. charlie: don't talk to us about freedom and human rights. >> and when there is a dissident in the hospital and who's dying, they're cruel, cruel. know.e: kong, someone you

will he be the next premier? >> everybody there is terrified watching to see what happens between now and november and the party congress where xui is going to get a second-term lease stays on this standing, as premier. charlie: beyond the age of what they normally allow you to do it. >> it's important to break that age limit if xi would like to break that age limit. charlie: in preparing this book "destined for war." , you looked at history, not just china and america, you looked at -- where had this been

this kind of rivalry in history? you looked at 16 cases. >> if you look -- i have a chapter of 1914 and world war i, a rising germany which after unification, europe was half the size of britain and becomes equal to britain. by 1900 and building a big navy. under this dangerous dynamic an accident happens, a serbian errorist assassinates an arcduke in yugoslavia. i have studied since i was in college. it is still unbelievable. the parties were not looking for a war with each other. how in the world did an archduke who was lonly emperor, at the

end of this war, every one of the participants. he is trying to keep together his empire and he's gone. the russian czar and trying to back the serbians. kaiser rejecting his buddy in vienna. france. you look at this, they were given a do-over -- charlie: war happens over a wrong assumption or some triggered event that nobody expected. >> right. and that's the extreme danger. and today, i would say the thing that sounds the most dangerous jong un. is kim charlie: here's what the president said. i went to mar-a-lago and said to the chinese and said i'm

passionate about trade and creating more jobs here, all i want is fair trade. i'm willing not to make the case if you'll help me on north korea. then three, four months later is they didn't help him at all, that, in fact, rather than trying to encourage north korea to do the right thing and not do this, they didn't. and so the united states is put in a very, very difficult place. each time the north koreans make another test, they learn from it, whether it's successful or not. and there is inevitability about that. what does the united states do? >> what we are seeing is the cuban missile crisis in slow motion which is speeding up. not long, not today, but in donald trump will have

to choose between attack north korea to prevent it from doing and/or icbm tests allowing north korea to attack the western u.s. he told xi i'm not going to have attackazy kim jong un to fran or los angeles. charlie: how is it going to end up? >> general mattis, north korea attacks seoul, maybe kills a couple hundred,000 people or more, which we have to suppress that to prevent him from killing millions people. and we should remember what happened in the first korean war. in the first korean war, north korea attacks south korea and almost pushed and took control

of the whole peninsula. americans came to the rescue at the last minute. charlie: harry truman. >> and there were leftovers in japan, five years after world war ii. we push them back up the peninsula thinking it will be over by christmas. and chinese push us back and lead us back down to the peninsula. so the chinese said, we settled the manner. not going to be a unified korea or american military might on our border. you say, well, wait a minute, we e not starting this, but kim jong un. trump has made it plain, he says he's not going to live with him who does some more tests.

but trump has said a lot of things and seems to change his mind, who knows. charlie: would you advise him in this circumstance, do not attack north korea even if they have a nuclear weapon that could reach san francisco. just live with it as we have with other countries who have nuclear weapons even though we have questions about the rationality of their leader? >> i'm not 100% clear. i don't know what i would do. i know for sure in 1994, i was assist ant secretary at the pentagon and ash carter was another assistant secretary. the pentagon was unanimous that we should attack north korea then. this was a time when they were getting the fissile material to be able to have nuclear weapons. i still thought that was the right thing to do. we understood that that might

trigger a second korean war and that would be horrific. and the south korean president, forget about it, under no circumstances attack this guy. charlie: north korean leadership, we had no interest in regime change and no interest in attacking you. we simply cannot live with the idea of you having nuclear weapons. please appreciate that. >> this is going to be a situation between the horrible

and -- charlie: the chinese don't want the north koreans don't want to have nuclear weapons. >> right. charlie: why can't they find some way to help the united states by saying to the north koreans look, we have been providing you fuel and coal and without us, your whole country is going to go down the tubes without us? >> listen, adult supervision in this situation, there is not. charlie rose is going down sitting with president xi and say you are about to stumble into a war that is going to be catastrophic for both of us. and afterwards just like in 1914, by 1918, they were are going to say how dumb was this. let's look and see what we can do together to prevent this pipp

squeak dragging you into a war. if they have those conversations, it would be painful because china would want us to do some things and they would have to do some things they don't want to do. they provide 95% of the oil for un.jong charlie: is he crazy and erratic? >> he's crazy like a fox. charlie: he believes nuclear weapons will give him power, not the power to attack, but the power to defend. >> and to survive. charlie: he looks at gaddafi who gave up their nuclear capability and look what happened with gaddafi? >> i agree with you 100%. makes no sense. this is just a pretense. no sense about that.

the question is, given that he has nuclear weapons already, and he can attack south korea and japan, how much extra does he buy being able to attack us. not much. if you could imagine american and china doing something together saying this is going to stop now. if it doesn't stop now, we are going to play out an extremely hard hand. it would be china cutting off by half the oil. and if he does another test, all together. but that would be jointly and the chinese saying, i see. you are building missile defenses in south korea and a lot of other designs here, we would like to have a military on the border. and you want to keep us entangled in this so deeply. the dynamic, getting adult

supervision and people being candid is extremely how. charlie: yu said china will be the biggest player in the history of the world, that's how strong they want to be. >> it's hard for us. charlie: 2050 is not that -- 33 years away. >> yeah. but most americans don't know that it's a fact today china's economy is bigger than the u.s. onomy by the single best yardstick from comparing national economies. so if you go to the "wall street journal" or c.i.a. website -- charlie: per capita. > if you think about two competitors and governance works or the last 20 years and ours,

we grow 2% and they grow 6%. and on the per capita, they have four times as many people as we do. if they are only one quarter as productive as we are -- charlie: if you look at emerging nations and what gives them power is the rise of a middle class that has huge consumer demand and when there is huge consumer demand for enterprises and businesses that can produce an economy that is growing faster than the established economy. >> they have a middle class that is bigger than our whole population. charlie: 300 million people. he was kissinger line, there he went to an opera and he said, wow! that's unbelievable, and must be one in a million. and he said that means we only

have a thousand of them. charlie: the areas you suggested is taiwan. >> taiwan would be extremely good about soverage territory. rump stepped into the surest bout. if taiwan -- charlie: you know what he said. >> trump in the transition had a phone call with the president of taiwan in which he suggested maybe if taiwan needs to be an independent country, then maybe it should. f u.s. supported efforts for taiwan to become independent, china would fight u.s. over that for sure. when you get to other territory, what about hong kong. and what this with the 20th anniversary of hong kong, hong

kong has been having some strong impulses towards more rights for individuals. they don't like to have people telling them, what can i read or web sites can i go to and more democracy. no space for hong kong. when you get to the question of the south china sea, there is more ambiguity and claim this line with all the features of whether that counts as their sovereign territory or not, there is some ambiguity. xi lie: this is president with the quote i read to you earlier. we absolutely will not permit any person, any organization, any political party at any time in any form to separate any piece of china territory from china. that was pretty clear. >> very clear. charlie: right below is a story

on u.s. trade. the trump administration is playing trade measures to force beijing to crack down on intellectual property, theft and ease requirements that american companies share advanced technologies to gain entry into the chinese market. > thises the way dynamic normally works. basically, the rising power tries to take advantage, all the advantages it can and in the chinese case, they have an artfulness about their combination of intellectual property theft, their -- because they have a huge market forcing companies to play by their rules, which include transferring technology. and then building up the competitor, excluding the external parties. if you look at apple or google, they can't operate in china. if china tells them you have to basically. yes, so

charlie: that's what apple did. >> and google for their cloud yesterday or the day before. but every day that's going to continue. charlie: that's how big the market is. >> people want growth, they are going to go to the growth area. and the ruling power looks at this and says, wait a minute, you are trying to take advantage of us. yeah, that's what you are doing. you will see some pushback. charlie: do read and understand your book, the only thing that can save us here is leadership. >> yes. well, i would say the biggest question for both china and the u.s. is what happens inside their own borders. and i give a little conclusion in the book, let's imagine adult supervisor, this hypothetically. and would say to xi and trump,

the biggest question you have to solve is whether your society can govern itself. look at the american society, you have to say you have a dysfunctional democracy. it ain't worth it. and if it continues not to work, it will be decisive and to xi, u are trying to retro an authoritarian system in which a society has smartphones and it's not going to work in that environment and you have to loosen adapttations. the biggest question is how does china manage its affairs and how do we manage our affairs. charlie: i asked yu who he most kaoping.nd he said >> i asked him about xaoping and

he said this guy is extremely impressive. charlie: i said to him, who hould i meet in china? >> somebody that was a lot like him. t he said about ping, he had iron in his soul. nd sent him off to the countryside and almost died. his sister committed suicide. he thought of getting out of this world and said i'm going to get my way to the top. i said who is he like? nelson a little bit like mandela. i said what? he said this is a man who is emotionally very secure and been through such trauma that is he

perfectly determined to do what he is doing. charlie: and married to a general who happens to be a singer. >> absolutely. art esident trump at the of the show at mar-a-lago, the daughter of ivanka come out and he said, i want you to meet my granddaughter and she's five years old. she sang in mandarin the song called "jasmine" which is a signature song of ping's wife. charlie: do you think there will be war between the u.s. and china? >> over what period? charlie: between now and 2050? >> i would say the odds are much larger than anybody in washington imagine, much larger

how large. not less than 25%. because i hope -- there is no reason to repeat historical mistakes. only those who study history are condemned to repeat it. there's a lot of special advantages in the current situation. if you had adults managing the it's very i think small. charlie: "destined for war." >> and the subtitle. charlie: graham alison, thank you so much.

is the graham wind ham largest. and now sports hundreds of at-risk children. it has received renewed experience because of a musical "hamilton." e have the producer of

"hamilton". i'm pleased to have them here at this table. give me a history of graham wind ham because it was the largest private orphanage. >> it has evolved and emerged in 2006, it celebrated 200 years of existence and when you think about it, it is foster care kids the new orphan in our society. so the institution has evolved in helping thousands and thousands of kids into the foster care system. charlie: they place kids where they can go and live with a family and they may not stay there for a long period? >> they do and work to get permanent homes for them, but to the agree they are mating a

commitment to that child to be with them until they are 25, not just until they place them. but they will continue to work with them until they are young adults to make sure that their path to success is established. most of them will just let go with placement with adoption but will continue to work with the kids. charlie: alexander hamilton's widow lived to be 90? >> almost long enough to see abraham linchingon walking down the streets of washington. charlie: that's amazing. charlie: 80 or 90? >> 90. charlie: she was involved how? >> you have to remember that half of her life, she lived after the death of her husband.

and she was involved with raising the money for the washington monument. and as she sings at the end of was her the orphanage crowning achievement. and what happened was, she teamed up with mrs. graham of graham windham who started this dea in 1797, and then around 1806, they formed this orphanage, which was -- whose mission it was to help new york city youth. charlie: you two are being honored as what? >> being good people, i guess. [laughter] >> we actually have gotten involved with the organization. jeffrey was this past year's honoree, because there are a lot

of relationships and programming that was born out of hamilton and graham windham. >> this is what happened in the year before hamilton came to the world in 2015, they would have something like 67 annual donors or something like that. and the year after it was up to 1,300. so the beauty of all of the joyous beautiful things that "hamilton" has brought into the world, one of them iselle vating graham windham to a place where it can expand its budget and provide services to more young people. charlie: how did the success of "hamilton" make that possible? >> no one knew that the orphanage existed. this is what happened, it was december of 2014. we had not opened yet to the public theater, but it was

already sold out and they were putting out new tickets. and graham windham sent out a tweet to our tweeter in chief and said thank you, we are graham windham and we are the successor organization -- we are the organization that eliza started and we did not know that. so suddenly, the orphanage everybody finds out is active. >> there are different programs that have been created in this relationship from the el inch za project, money is given for the cast to work artisticically with the kids that are being served by graham windham and the latest technology project they are putting in the school.

00 kids who live there in k-12 school. someone from puerto rico called me and said i'm going to see "hamilton." you don't know me, i would love to have breakfast with you. i said yes. the guy happened to be the chief person for hollywood it-pack ard hewlitt-pack ard. and we want to do something with you guys. i said fund it. charlie: they built the lab? >> in the graham windham school for 300 kids that are being served. all of these unintended consequences by "hamilton." graham windham is serving

4,500 kids a year. and has 17 full-time staff members whose mission it is is to nurture these teenage kids so they can graduate high school successfully, graduate college successfully and then start their careers in the working world and develop into independent autonomous, productive adults. charlie: worthy project. >> it's a fantastic project. charlie: let's talk about "hamilton." great show. are you in a position of the rest of your life going to be judged what you do in contrast to "hamilton"? and had the joyous transformational experience of producing "rent."

when i was 31 years old. it was written by the extraordinary author jonathan larson who died on the eve of the first preview of "rent." and when i did "rent." people said i hope you enjoy this because it's never going to happen again. and i smiled at that and i said you're probably right, it's probably never going to happen again. but it didn't stop me from committing myself to this crazy endeavor that i love, which is making new musicals and figuring out how to crack that code to make a great new musical. and "avenue q." "in the nd we made

heights" together, and then "hamilton" which has absolutely been the biggest one of all. charlie: by a wide margin. >> and what is so joyous about that is this notion that something comes into the world through the inspiration and artistic ingenuity of someone like lynn and creates a need where we never knew and creates a want. and yet it fills us with so many rich feelings. feelings of aspiration, feelings of patriotism, feelings of comrade erie and feelings of os. and of grief. charlie: some of the actors said it made them part of our history. >> it has been a game changer,

in a, how we can educate young people and inspire young people and how lynn and tommy and our creative team have created a show that looks like america today. so that young african-americans, young latinos, young mexicans, young asian-americans can look at that stage and say, i'm part of the story. charlie: exactly. american story. as one of them said to me, it made me feel like i was truly an american. >> maybe for the first time. >> we always had a complicated life in politics for the most part. charlie: he had koch. manuel's dad.g in

the other day i was going to your office and some lady screams, hey, hey! she says you have to write a book about parenting. ok. all in 30 seconds. so it's definitely changed our lives for the better. and to use everything that hamilton and everything that "hamilton" has brought to do very good things. aham windham, the hamilton initiative, the prize sweep stakes that we do now that raise millions of dollars for institutions and do it with opening. every time "hamilton" has an opening, we have a sweepstake.

in the united states. >> there are three "hamilton" companies running right now, one in san francisco, one in chicago and one in new york. and within one year there will be five when we add london to the mix and another u.s. tour that will open in february of 2018 in seattle. it will be in seattle for six weeks and start touring across the united states of america. >> we are doing the hamilton initiative and going to bring 250,000 kids who are going to be participating in the cor can you um that ends up seeing "hamilton" at the theater. charlie: is there a movie coming out of this? > there is no movie coming out

for a long time. we needed to ensure that the indelible experience of seeing it on stage is the way to experience "hamilton." >> manuel says it all the time and attracted us to broadway before any of this happened. there's nothing like that life experience with actors that are doing this for you that night. there is no experience like that, other than real life. >> that live experience. charlie: how many kids have come through graham windham? >> i'm sure it's tens of thousands right now. >> they are serving 4,500 kids right now. charlie: and putting them on a path to be enormously productive "hamiltons."rite >> entrepreneurs, doctors, nurses and teachers.

charlie: thank you. wonderful to see you. back in a moment. ♪

charlie: finally this in an upcoming show, we look at "detroit" that tells the story of the tragedy that happened at the algiers motel in 1967.

>> you know what happened at the motel? >> what happened at the motel? >> you don't know? >> i was working security and on tuesday night, we heard gunfire coming from the area of the algiers. police were there. there was a lot of shooting. when i went in there, three kids had been killed. >> no. >> they were killed right before you got there. >> you carrier a .38, right? >> a revolver.

. i do have a .38 >> i didn't do it. >> agh, here we go. > here in city of detroit. state police and national guardsmen are available. >> i'm declaring a state of emergency. >> they are destroying the city. >> police. >> i'm just going to assume you're all criminals. >> don't talk about this to anyone ever, understand? >> this city has rocked. but change is coming. >> i told you what i saw. i'm trying to help you. >> change is coming. >> what's the matter with you? >> change is coming.

change is coming. >> i need you. >> you want to go home? >> yeah. >> the writer next to me who whose work is extraordinary came to me with a story set against the detroit ries. a true story of a true crime set in the middle of this in the algiers motel and it was simply put, an execution. and portrait of police brutality and racial injustice that was extremely moving, very timely and very topical and the same time he told me this story, the decision not to indict the officer involved in the michael brown shooting had taken place.

i felt that the story needed to be told. ♪ ♪

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betty: stocks drop, the dollar weakened. a grand jury handling the russian inquiry. yvonne: sterling headed to its biggest drop since junune. the bank of england cuts its u.k. growth forecast. betty: investors are eyeing friday's critical job numbers. for 180,000ion is new jobs in july. yvonne: the u.s. has sanctions on venezuela with oil restrictions. betty: "daybreak asia this