story. >> host: finally a lot of people said at least the system works. if you look at the entire story and the role that the institutions of government played do you think that the system works at the end of the day? >> guest: the system works in this case? well, the system worked in the sense that the american public put a stop to this. it was the pressure of the american public that said enough. we have had enough. this trial has to come to an end. i think that both sides, and i'm not talking about ken starr personally and president clinton personally. both sides got to the point that they really lost their heads and were ready to win at all costs. there was not restrained. this, i think, is what produced did just collision that occurred here that was not good for the country. i hope in writing this, one of the reasons i spent so much time

trying to get this write that really i did think we have to learn that we can never, ever let us get to this point again in the country. it was a devastating event when so many other things were neglected, so many other things were happening. terrorists starting to think about attacks on the u.s. this is what we were focused on. ..

>> guest: but i do think that by the time we got to the election, people were so exhausted that they had just enough of this. i do want to say that one of the people as you know in a book that comes out very well is al gore. he doesn't get credit for this but when he stood up for president clinton after the house impeached him and stood in the rose garden, he knew that could wreck his chances of ever becoming president. and he did it anyway because he was vice president and that was his duty. i do think that it was very likely that al gore would have been president but for all these events. >> host: ken gormley, you written a terrific book. thank you very much. good luck with it. >> guest: you're been the best host ever, greg. i appreciate that.

>> and the director of an institute that deals with china talks about how china's future will impact the united states. this event is an hour and 20 minutes. >> thank you very much. and thank you, david. if it weren't for david we wouldn't be a. we met him at frankfurt book fair where we are introducing, were launching the chinese addition of "china's megatrends." that was in september, october i guess. it was then published in china in september. and just now this last week published in the u.s. u.s. publishers, were lacking a little behind even though they didn't have it translated. that's another story. we're going to talk here not for very long, maybe 15 or 20 minutes, to kind of frame where

we are coming from. because we want of a conversation with you. we want to talk to you about what your questions are. how many of you have been to china? wow. well, maybe we better regrouped year. [laughter] >> that is terrific. that's part of the world that we have been talking about. well, we've been talking this last week especially intensely as we been touring here in the states. we toured in china which is another experience. really interesting, not that much different than touring in the states. but you know, as we've talked about china and with some of our interviews and so forth, sometimes the talk about china, what they are doing and how they relate to us, and is there an opportunity, sometimes they get quite emotional. >> and you have to mention, we

got to know david in franklin. and at frankfurt was sort of a clash between china and germany. and the question and where china stands and what china stands for. and the same emotions we sometimes face here. and when we were in china, of course, the chinese asked us what can we do to make our picture, the picture of the world has of us better? and it's quite a bit of communication question. how does china communicate what it is, and how does the west tried to understand what china really is. and in china, we used an example, because it is somehow, the world would be a neighborhood into which a new neighbor has moved.

and this family has not gotten too much attention for quite a while, but all of a sudden this family starts improving its house and it gets the attention of the other neighbors. and of course, with anything that is new in a certain environment, what starts first is gossip. and gossip is more interesting if it's negative gossip. so we shouldn't be astonished if what we hear about china is mostly negative. although, not everything is gossip. some is quite justified. but it should be balanced, and we as the established universe as we call the west, we should try to get a picture of what this new neighbor is really like. and this was where we started

when we wrote our book. we wanted, taking experience john has in china and small experience i had with my teen years compared with his 14 years. >> don't exaggerate. >> to analyze what china is really like. what china stands for. >> well, you know the extraordinary story of the rise of china, but it bears repeating. in 30 years, china went from the 137 gdp, 137th in the world, same as my lower. in just 30 years to becoming this year the second largest economy in the world. extraordinary. and of course, we've got to understand what that means and how that impacts on all of us. there's already 470 of the 500

fortune 500 of the u.s. are in china. and were already doing all this business. and that's why, partly why they rose up to number two. but i want to put that in to perspective, too. there are three countries are about the same the size can have the same size of economy. germany, japan, and china. and china moved up has to germany last year. they will move this year to be number two. but these three countries, the size of their economies is between four and 5 trillion. that's it. so when time is up to be number two, it will be 5 trillion, something. the u.s. is 14 trillion. that's the larger picture. so china is not going to pass the united states by next christmas, though some headlines would suggest. it's going to take a long -- it's going to take a long time. but it's interesting what they

are doing, because it's not only the gdp. the gdp is just a collective figure. and the more you put all the figures together, the more you lose intelligence. and their certain parts of that chinese gdp that are really going to move very, very fast. and those in the new technologies, you have heard of be widely, the company that warren buffett invested in them the largest foreign investor echidnas a maker of electric car. it is a hybrid initially into this country, this year. but that's a new technology. the head of that company said something very interesting. he said, we can't possibly compete with ford and a lot of the big western companies who have had 100 shares of experience with the gasoline driven cars. however, with the electric car, we are all in the same starting

point. it's not only with electric car, they are looking at robotics and biotechnology, and telecommunications and nanotechnology. all of the new technology, where everybody is at the same starting point. they are not going to compete with the west has all this experience. very, very start. so while it may be 20 or 25 years for china quote, catches up to if it ever does come in many, many areas china is going to excel. and something else that you must know, and that is that today, and this seems to be, you probably know, many of you, but it is a surprise to everybody else. china's economy is now 70% private. 70% private. private sector. that's what china is all about.

the private sector. so the other thing i think would like to talk to people about it is that there are no communists in china. china is a country with no ideology. it's not communist. it's not capitalist. it's something entirely different. it's a pragmatic building of a new social economic system. and that's a system that we have called vertical democracy. >> you all know that about 200 years ago, with the constitution of the united states, america founded or created the modern western democracy. we believe that china is on the

way to create a counterpart, another kind of democracy, which as john said, we called vertical democracy. and i want to make a little drawing so that we can visualize how we got to the understanding, and why we call it a vertical democracy. we began looking at western democracies, because you can imagine when we were studying china, we were not content with socialism with chinese characteristics. that does not really express what it is. so we looked at the west, and we find that this is sort of a

horizontal structure where the people all are equally entitled who periodically lets the government. so these are the periods. and to simplify it, in this western democracy, you have party a and party b. and, of course, they are competing to get the most votes who have the justification for governance. what is natural is that party a has to make party be wrong. and party b. has to make party a look as bad as possible. that's in the nature of gaining as many people to work for my party. so if we look at the structure, it is, of course it gives everybody the profession vote for a or b. but it is also a more dividing

system. now when we look at china, and you probably know the political structure of china quite well. we have a quite large government structure with different levels of decision-making. but we have, although there are different parties, in general we have a one party system. and then we have the huge population. now, how is china ruled? well, we analyzed that they are our bottom-up initiatives and top down directions. and the way the system works is by this interplay of the bottom

and the top. this of course is the government is a constancy. which allows the government to make long-term plans and long-term strategies. because it is a thinking logically that not have to be election driven. and the people, the bottom, we look at china and its development, it is more and more empowered. and get stronger and stronger. and the government listens more and more. it's a maturing process in this vertical structure of the government that gets its justification not not by being elected, although there are many elections on local levels, but by the results they achieve. and that's why we call that a vertical democracy.

>> let me give you two quick examples of the bottom-up initiatives in china. the first took place right after deng xiaoping took over in 1978 -- i and all the people know the story of the 18th farmers and i'm sure some of you know, but very early on and deng xiaoping's period, and of course he's a great father of all the changes in china. 18 farmers up to the northeast and a very, very poor village decided that they would break up their collective. all farming was done in china with collective. in these 18 farmers who were part of this collective said we'd, and they discussed it for sometime and they said we want to divide this up into a team families. family units.

because some of the people worked very hard. some of them are real smart about. but let's have everyone work for themselves. this is totally against the ideology of the party of course at the time. it turns out they had the support of the local leadership, which was really very good. and deng xiaoping eventually and that about this, and in five and half months this bottom-up initiative by these 18 farmers became national policy. and they change from collective farms the family unit farms. everyone didn't do 100% overnight, but that was the initiative that started it in a very short time that changed everything. a very recent example of bottom-up initiatives, this has been going on for five or six years -- know, 10 years i guess. is that cities and provinces all over china have been initiating and doing business with foreign

companies and foreign countries in creating joint projects. this was always supposed to go through beijing. more and more it didn't go through beijing. and last year, just last year, 2009, the national government made this national policy that all projects could be done directly to foreign companies and foreign countries, up until $100 million. and then that had to be somehow checked through the central government. but this change that policy so there are to bottom-up initiatives that were embraced by the leadership in this dynamic. you always have to keep -- they tried to keep about us between initiatives coming up which are more and more, and the directives that are coming down. but you know, in this 30 years, now 31, 32 years. china going from 137th two the

second largest, how did they do it? the question is, how do they do it? and that's what our book is about. we've sorted out what's been going on and we say look, there are eight pillars that underlie this shift to a whole new, a whole new kind of society. and pillars is a very, correct me if i'm wrong, a very good name in chinese, because pillars in the chinese form means both the structure of the buildings and principles. so that was very good for us. the very first one that deng xiaoping articulated very early in very famously in a big speech was the emancipation of the mind. he said we have to move from indoctrination to emancipation. we the government can't do it alone. the people have to do. we have to emancipate the people so that they can build a new

china. another of our pillars is framing the forest and letting the trees grow. so the government said okay, here's what we're going to do, but how you do it is up to you. for example, the special economic zones. they said in these economic zones there are no taxes for a while and this and that, but how you want your printers doing is of you. and by the way, those who took advantage of the emancipation were entrepreneurs. and the energy from that really, really on set, the other pill i guess we can mention is the idea of crossing the river by feeling the stones. you've probably heard that, and we sort of like it. i like asserting as a way of life. crossing the river.

adjusting your course as he tried to get to the other side. so they had all these -- china is never -- no country on such a vast scale practice trial and error the way china has. you try things, they don't work, and it's very pragmatic country, we do what works and we don't do -- we let go of what doesn't work. so we will probably be talking about some more of the pillars and in the response to questions, but especially the emancipation of the mind which launched china 30, now 32 years ago. >> yeah, when john says trial and error, you know, when we listen to that, we say yes, they do trial and error. but imagine if in the united states there's this huge debate about healthcare and the healthcare system. now what if president obama would say, okay, let's declared

oklahoma to be a trial and error for the new model for healthca healthcare. could that happen? probably not. because you know, party a and party b would bang at party a. and why we are not voting against western democracy at all, because you know, i am european. and the europeans claim to have been heritage of human rights and all of that. we should seriously look and with an open mind, look at china and see what they achieve by using different matters of communicating with the people, and listening to what the people want and how it works. and you know the last time we were talking to students, we

were just talking on our way here. was when we talk to the students in tianjin. and that was the tranninety university of economics and finance. the first time we came to the university we really thought we would be somewhere in the united states, and some elite university. because it is such a modern, how you call it, compound? >> campus. >> campus. and what we experienced there when we have our conversations and discussions with the students, and they do not hold back, is this energy of the next generation of chinese. what we don't really think of in the west, and what i have not thought of before. i really got into china, and analyzing what china is about

was that where china comes from, what it has behind it is 3000 years of imperialism, and in the 20th century which was filled with humiliation by other nations and chaos. and they really, the generation after the cultural revolution really started from zero. and the chinese, the young people who are in your age now and a little older is a completely different generation, which a generation which has not experienced all the suffering and the poverty their parents and grandparents had suffered through. they experienced the social freedom that has never been there before. and we believe that this generation, which is now building the new china, while

you are building america of tomorrow, has a chance of really creating a new world. because for the first time, the two biggest nations in the world, china and the united states, are not enemies. but are really seeking to find a way to cooperate with each other in a positive way. and we think that is a great opportunity for you as being in america, and for the chinese. and we believe the more you see -- don't get in -- when we read articles about china in the media, it's often that you are pushed in a victim mentality. look what china does to us. it's taking our jobs, it's doing this and that. that put you in kind of a victim

thinking. but you can also think what opportunities do we have. what can we do with this new market, what can we do with a population that is one-fifth of the world which is much more open, which is opening up to the world. and what can we do for our personal life and for our country's to live together and make everything better. >> now your questions. yes, front row. front row center. [laughter] >> microphone for c-span. >> thank you. doctors nesbitt thank you for taking my question. in reading excerpts from the book and listening to speak i've heard a lot about the efficiency of the vertical democratic system and the efficacy of bottom-up change. but i have to ask, in a political system where there are not fair elections, how is it

ensured that the government stays true to the will of the people and respects the rights of the people? and do you see this potential class going anywhere in the future? isn't anything that might happen that might challenge the one party system? >> there are elections and leadership. it's not handed one from another. they are very much contested and they will be in becoming a collection in the new leadership of 2012. as far as we can tell. but it seems to us that the leadership is tested by its results. it's tested by its results, and those results -- you know, the pew -- or the new jersey? no, they're in new york. the pew polling organization, their results in china was that 89 percent of the people of proof of the government, approve of the leadership versus 47 percent in the u.s., whatever

it is. this is a western measurement. >> what i could add to here is how is the system sustainable? and that was your question. we say that the sustainability of the system depends on keeping an equilibrium between the top down forces and the bottom-up forces. in the government i think, you know, it is a maturing system. it's only 30 years -- its history is 30 years versus the western democracy that has 200 years. and you're much too young of courts, but if we think back, how did the united states look 50, 60 years ago? you know, john has been, was one of the people who lived through that time when there were right,

when the blacks could enter a restaurant. when there was no fairness to everybody. so is easy to forget that the western democracy had it's time to develop and to mature. and the chinese, as we said, is only one-third their as we think. but the government increasingly gives more space, gives more room to the bottom-up initiatives. and the backing up of both sides, when the bottom goes up, we've got a little too sight, then they pick off a little bit. when the top down pushes a little too hard, they have to back off. this balancing out is what will keep the chinese model sustainable. >> what is not publicized in the west is all of the hearings that are now being held for new projects.

for a new dam being built or a new plant being built. and the hearings are being held, they canceled two chemical plants because there was too many people in the neighborhoods affected were party to that. they're having all kinds of hearings all over. not in every province. as you know, from the difference being a province, province is great. china is the most decentralized country in the world. that's another thing that you really have to see what's happening. but the government backs off of things, one of the examples i will give you, when they think the people are not responding in this vertical. for example, you know much more about this, you than we do. but when they try to change a stylistic change in the chinese characters, their words so much disapproval, start to percolate around the country that they canceled it. and they were starting to do

this. it's just beginning, but the whole thing about hearings for projects and so on, is part of their, this new vertical democracy that they are doing. so it's just the beginning, but it is starting there. that's what we think will mature because the people are responding and they seem to like it. but problems. >> just this morning i was listening to npr and there was breaking news about google's computer systems being hacked, i guess, or invaded by what might've been state-sponsored or state-supported initiative from china. and that brought to mind the way china has limited the access to a lot of information through google. google working with china has had to limit the results of searches on their search engine.

and i was wondering how you reconciled this notion of the emancipation of the minds with the limiting, limiting of information. >> first of all, this is not breaking news. industry that way in the west, at the back and forth between the chinese government and google has been going on for five or six years, and google really took a big hit, you write member, for years ago when they agree to some censorship that the government wanted to. and this continues and we don't know who's hacking by the way, but the larger picture is that there are 350 million people on the internet in china, more than any other country in the world by far. and the government gets freaked out now and then about some of the things that are on it. and we read a lot of blogs about what they are writing about the government. government is trying to figure this out. from a western point of view,

and chinese house, this is a no win game for the government that they will not be able to do this. but they are struggling to see how they can do the transition to the kind of openness that other societies have and they are very defensive about the shortcomings of china. so this is going to go on and on and on. as everyone tries to figure it out and get comfortable with it. but it's not a breaking story. >> to give you an example, this came up in china as well. and we had a discussion with a government person on tv. and he mentioned that china is going like a fast speed train. and we commented, yes, but you are covering some windows of that train so that the people cannot look outside. so you know, and he said, and

the bottom line is the emancipation is not only within the people, you know, this part, but the emancipation of thinking, the relaxing is also a process that's taking place in the government. and what the chinese, and you probably know very much, really value very high, how high is the stability and harmony. now why the idea might be from our view hokey, let's have elections next year if the government is so good, it will be elected in way. imagine what would happen if that really would take place. how, you know, one party or one group would fight against the other, and the chance of really terrible chaos in this country

would be absolutely there. so it is a balance of slowly empowering the people so that the process of democrat is asian can be harmonious one. and the united states has experienced that you cannot take democracy and put it on a country. because it doesn't work. if it doesn't grow out of the people. and that's what has to take place in china. >> does that mean the class is over? [laughter] >> what was i going to say about that? well, we will take another question. >> thank you. i was wondering, is this vertical democracy, could it be a model for other countries? or is this a system of government that really only works with the chinese mindset?

>> well, if you're one of the many underdeveloped countries that has been trying for decades to grow and to prosper and to make its economy better, and you've been dealing with the west with a governments, you are open for another model. and indeed, china is becoming -- how did they do it? how did they do it? in 30 years when we can't get it done, and is becoming a model for a lot of developing countries, including, if i can include that in the underdeveloped countries, russia. russia -- there are a whole bunch of russians in china today trying to figure out the chinese model. how did they do it, and so it is becoming an almost competitive model to the western model. but i was going to say on the last question, that too often -- see, you can do democracy many, many, many, ways.

to do was invented by the greeks. and by our light, greeks were not democratic. they had slaves. they had very few elections. women couldn't vote and so on. and, you know, switzerland, one of the great beacons of democracy, right, women only got to vote 20 years ago. so you know, democracy is in flux, and how you practice is all different ways. mississippi. are you ready for this? 13th amendment, and of slavery, right? mississippi didn't ratify the 13th amendment until 1995. i mean, it's a process, right? so they are starting -- it is primitive in many ways from a democracy, pure democracy point of view from the western idea. but the problem is you can do democracy in many different ways, but the west insist that

there's only one way, and that is our way. and that's going to get us nowhere if we keep thinking that's the only way and only if you do it our way, then can we call it a democracy. we've got to get beyond that. >> someone in the back? >> i was actually in china the past summer for a month, but you to collect will have been in china for decades, and so you must have seen much of the amazing changes you've been talking about. i was wanted you to discuss some of the changes, and perhaps what inspired you to write a book about them? >> i'll tell my story. >> go ahead. >> know. well, when i first heard going to join in 1967, and it was such a poor, primitive backward place. it was just absolutely amazing.

and i've been there 100 times or, i don't know. but all through the years i have seen the slow, but nothing really much happened until 1978 when yuan and. -- deng xiaoping gaming. has over the years people said i -- is that in the book? some of you look at them. in 1996 i had a private meeting with deng xiaoping, the president of china. it was very interesting because we both grew up on a farm. i grew up in a farm in southern utah, and he up in the northeast in china. we talked a lot about growing up on farms. but we really got involved in lots of things, and it was, 96 was the trouble with the mainland and so that i was a big

subject that it was sort of the elephant in the room. at one point i said to him, you know, taiwan has a little story to tell, is ball story to tell and a great job of telling a. china has a big story to tell, and you were doing, mr. president, a terrible job. silence. and finally, he said, he doesn't speak english. finally he said, why don't you do it? why don't you tell the story of china? and that really started me on a journey that really didn't get underway until we started to go to china in 2000. but that's -- the inspiration was, how did they do it? no one has done this in the history of civilization. moved so fast for a sustained

change, sustained change for so long a period. and when someone says, well, china is going to be -- we met, no one has done this before. why would -- why would you bet against a china with that kind of a record? you can think that, that's fine, but you know, it looks as if it's going to go on. and we think, our guess is that china, crossing the river and getting to the other side, china is only about a third of the way. >> what is so fascinating is that when you come there and you look out of your hotel room, and this is -- it's like when you throw a stone into the water. but, of course, the ways go out. when i went there for the first time in the year 2000, that was even taking place in shanghai. you look out of the window, and where there were huts in

january, there were houses in march. not march, but in september. and, you know, it was unbelievable. buildings are growing like mushrooms, and now this, what happens in, happen in the main cities early on is now going to the provinces. and the standard of living and the conditions of working are getting better, gradually, and moving, and the wealth is not only and the coastal area of china anymore. but it is moving towards the west of china and the north of china. because what is happening is that the factory -- a used to be, you've all heard about migrant workers in china. china had mostly farms, farmers. and they were really dirt poor economy, really not knowing how to feed their family the next day.

now when the opening up and the reforms begin and along the coastal lines the factories were built, those farmers start to move to where the factories are. of course, that brought about 400 million people out of poverty. now wages are going up in china. and what is happening is that the factories are moving to where the people are. so increasingly, factories are built in the poorer regions of china. which brings economic wealth to the people who have not had yet such a sheer of the economic progress that china had. and what china also -- and this is a question of the efficiency of the government. what the government knows very well is that you cannot have economic progress without a well

working infrastructure. so that are building bullet trains, net of bullet trains also for china to connect the poorer regions with the wealthy nations. to give access to all what is going on in the east of china to the west of china. and this is a very smart strategy. >> in the back, the fellow. [inaudible] >> wait for the microphone. >> you talk about -- can you hear me? you talk about the economic transformation in china dating back about 30 years. and in america, i'm interested in some of your comments about some of the trends have to say for us here. because for about 30 years we have been having difficult economic developments, some of them directly reflecting china's

rise. so i'm just interested to hear your comments about that. but, of course, that is a very common opinion in this country. >> what was the last part? >> that state common opinion in this country that china. >> i think the united states has to bear the responsibility to what happens of the united states. but the united states as part of a much larger ships, and that's the shift from the west to east has been going on for some time. i'm not sure it's a reversible, but it hasn't been reversed for the kinds of time period we're talking about. you know, we talked about vertical democracy and deficiencies here. is at a time in the west, all over the west, are the parliament, not only the u.s., are the parliament are paralyzed. look at the u.k. and so what is happening?

what is happening is it seems that the west, with all this progress, somehow their inner gees were spent and they're kind of drifting back again. but whatever the reason is, the shift, the huge shift is from the west to the east with china being the leader in the ease of the economies that are coming out. but you know, china is helping in this regard, a great deal. i mentioned the 470 of the u.s. companies, 500, are in china. general motors, alcoa, their profits, the revenues, general motors sales in china went up 50 percent in 2009. it's one of the reasons general motors sank where going to make a profit and 2010, which surprised everybody. but because of all of the sales they're getting from china. china is helping this, not a

threat to this, but certainly the decline of the west is matching the rise of the east. [inaudible] >> how the multinational -- but how does that help in terms of the labor market and business that's done in america with american -- >> this is -- this is kind of a zero-sum game, where if you get -- if you gain workers in china, you have to lose workers somewhere else. and a global economy that is expanding, you can increase workers everywhere. and that's the direction we're going. we are moving and a very large way where you are moving toward a global economy where we are also economically connected and

integrated, and there is just one economy in the world, just one, we won't be able to sort out what the gdp of our. in fact, they're not very trustworthy are now. you really can't say what the gdp is. it is already so economically interlaced with germany and china. with the rest of the world as we move toward one economy for the whole world. and they are taking jobs, an old idea that before globalization came along, the west was still mostly industrial, and that's been spent. and unless the west keeps up with the new technologies to create new jobs, it's going to be in trouble. and look at china. i mentioned earlier, china is focusing on the new technologies, not the old industrial technologies. the new technologies, and that's where the growth is. that's where the jobs are.

and the west, if it continues to focus on the old jobs, and not on the new technologies and the new markets that will create the new jobs, it will receive increasingly over this next decade. >> do you want to call on somebody? >> hi. think so much for coming to our school to share what you observed in china and your knowledge and short analysis. i take a lead like that analysis of vertical democracy, and i came here 20 years ago, and i have heard a lot why china is now doing this and it's not doing that. and i could tell there certain things that we are practicing here. our democracy can not be directly transferred to china that will work, and that's what i really appreciate your analysis. and there are two things i, you know, particularly interested.

one you which and that in china there is no communism, there is no capitalism over socialism, no idealism. that's what i have observed. and something, that government is doing right from bottom -- from top down or bottom up in me somewhere that is working, that chinese people are happy and people are having more and more wealth. but in the process, i see something is getting lost, and that is what i have observed, that people are more into money and running after that. after all, after some years of poverty and no wealth and all of a sudden they can own car and house and whatever. and i have seen that. but i see that more kids of our kids, our counterparts of kids sitting here really do not have a lot of things in the spiritual part. and they're working very hard. they are studying very hard, but

some part is missing, and that's something i've wondered whether you observed and whether have been some comment. another thing is, in you know, we tend to see chinese students studying very hard but more and the back or not as creative are not as much opportunity as our students have in america in terms of, you know, being more creative or getting opportunity to freethinking and that they are more back steps. and in that, but somehow their kids coming out and producing that kind of, you know, innovation or technology and is catching up and to be as you say, number two. so how can our kids here prepare themselves and compete with the kids in china? thanks. >> good questions. >> to the first part of your

question, the spiritual desire, which we all have, 30 years ago, you know better than i do, you know, when you're dirt poor, your spiritual desire of course is overwhelmed i the desire to reach a certain degree of wealth. and so of course the government and the people were working towards the direction of having modest wealth for themselves and for the country. but the government as well as the people -- you know, it's when you wish, when you really wish for something, to get something, the period in which you want to have it and in which you are fighting for it to get it, this, whether it is wealth or a car or whatever, has a much higher value than when you have

it. once you have it, you take it as a given. and then the awareness of other things is growing. and the same with the chinese. they have reached, or part of the chinese have really reached a certain wealth. and now they are searching for the spiritual, to feed their spiritual needs. and i think it was hu jintao who said that we have to not only create a material -- deng xiaoping, material -- what's the word? >> a national, a national country but a spiritual. >> a spiritual country. so they are doing their best to revive confucianism, to treat the culture and heritage. their heritage is valued very

highly in china. has a long, long and really wonderful history, which we see coming up. and we've been in tibet, for example, lately in september. and they make big efforts to keep the language to support the language, to support the tibet and culture. what they need and what the people and the government is fighting for is to have a balance between modernity and between history and the values of history. and that is not easy. and every single person, we all have to balance our life between what we want to achieve economically and what we want to achieve in our personal values. >> as to education, first of all, china has a literacy rate of 97%. because of the chinese have

always put a premium on education. but their education system is almost totally wrote learning. and particularly those people on a course to go to universities, everything is talk to the exams. it's all wrote. it's all boring, but that's true of most, with this one exception, but most education systems in the world. all over the world, we are teaching, we are doing education. yesterday as we're trying to get through today, when we should really be at least teaching education for today. if not for tomorrow. the chinese are working on that. i remember, remember the television show dialog, we have a big audience on a television show in china, and the government had just announced that mandatory education for, nationwide, ages come was going to go to 12 years by 2020.

and i said wait a minute, wait a minute. you're talking about keeping kids in school for four more years, but giving them the same kind of education. same kind of rote education that doesn't address to the creativity. and i said, the point is what are they doing when they're sitting in school for eight years our soon-to-be 12 years. what are they learning. how are they learning? and we got a great ovation for that. recognition that that's what's got to be addressed. so we talked about crossing the river, trial and error, a lot of experimentation going on in china to figure out what kind of education system, what kind of education for today's world, no one in the world has really mastered that except the united states in higher education. because such primary and secondary, except here. we have got a great higher education system because of

competition. for decades and decades and decades, the universities have competed for students, competed for competition for customers. maybe the school is better for customers and we're trying to introduce, say, look you've learned so much from the marketplace about economics, wider israeli marketplace, economic system, or at least change from the road education. that is a big, big issue in china. >> thank you. so i guess i might be the next generation that you talk about because i live in china and i have been here for like two years ago here. so what i observed was that the education system was actually not that great as you said in china because -- i mean, what i experienced was the constant change of policies made by the governments, educational

department, and they basically, they are talking about different ways of selecting the elite's for the country, but i think -- and they also emphasis -- what they did was the emphasis much on becoming elite instead of becoming a person. and i kind of disagree with some people say that the focus on heritage and on cultural thing. because that's what actually hindered the creativity and china. because what the parents, what the authority said, and they just keep following that. and also what i observed was the law, the law and enforcement part of the government was actually not that great. so how do you think that c