>> on the agreement we are still in the ninety day consultation phase with congress and stakeholders. we think there is great probably there to move tariff barriers, nontariff barriers and address the regulatory standards issues that create unnecessary cost and obstacle to trade. we spend the last year working with the e.u. to identify what the key outstanding issues are. we think there's a momentum and a lot of political will to address the outstanding issues. once we finish the ninety days and the mandate process. it's successful we look forward to launch the negotiations. i would like to address one other pressure. the importance of protecting trade secret in trade agreement. they manufacturing process or extremely valuable asset to

american companies. unfortunately theft of trade secrets escaped spucially by -- through the digital strer that drives our economy. ..

>> thank you very much, senator baucus. let me ask a question about footwear on the value global chain. you are pushing for 21st century or next generation agreement which sounds constructive to me in a number of chapters. and i also want to see you all as part of that. avoid these outdated provisions that would undermine the momentum needed to reinvigorate the global economy. this requires a particular look at the global value chain. research considerations, all of the issues that go to the value chain that defines the operations of so many brands. if confirmed will you make sure that as part of that process, as part of the transpacific partnership negotiations you look at the key areas that relate to this concern like the rule of origin and the tariff for consumer goods? >> yes, senator, we will look at all of those putative

>> the next question deals once again with the internet. my deal is the internet is the shipping lane of the 21st century. it has enormous benefits for people on a day-to-day basis. but it's also reshaping the manner in which commerce is conducted. but there aren't any as of today distinct global trade rules that ensure that digital trade doesn't face protectionist kind of policies, protectionist discrimination and there's a lot of concerns for example about the big win that was one on the sopa sopa for these discussions. what can you all do to make sure the digital economy gets the attention it needs to ensure the internet is free and open in the market, particularly for american producers and the digital goods and digital services? >> senator, when we talk about the tpp being a 21st century agreement to introduce new

disciplines for new issues, the digital economy is clearly one of those areas. one of those new areas we have been focusing on. so in the tpp negotiations while we are in the mix of the negotiations we are seeking the free flow of data and that us plants are around restrictions the companies might have in terms of where people prepare their data center and how it is ex cloud computing so very much on the agenda of the e commerce and the digital economy is very much on the tpp agenda. >> one last question on the reasonable question, are you all going to send to us a proposal that represents your views on what tpa is all about or how do you envision that unfolding? >> i will consult with the chamber and others but our intention is to engage with this committee and engage with the house ways and means committee as you work through tpa issues. >> so you would send the chairman, chairman bachus and

senator hatch, and you would in effect senator statutory negotiating goal. >> i would work through what format engagement it takes but i would be happy to engage with you. >> thank you, senator. >> thank you, mr. chairman. mr. froman, thank you for that, too. we talked on the issue of the state capital and state capitalism and the market is distorting behavior of state owned enterprises and that is an increasing problem in terms of these deeply entrenched state capitalism models if you will and the impact when it is competitive. this is an issue, one that congress didn't think about when we considered fast track 11 years ago and one that we should think about now. can you assure me that there won't be backtracking on all the issues of state-owned enterprises the further we get into the tpp negotiations that we have strong enforceable rules

on the tpp context to address the soe's? >> that is the bulgaria we are trying speed on disciplines and soe's that compete with private entities they must use them on a commercial basis. it's also part of our dialogue with the chinese in particular outside of tpp in particular about their reform efforts and how important it is for leveling the playing field for the company's. >> so you'll have bilateral investment discussions and talks with china that is a main part of the agenda. >> i want to talk about the steel industry for a moment. the company called irg steel in new york closed about a year ago several thousand people lost jobs. this is an industry more than most operating on very thin margins with a 50% profit partly because of a trade decision made

by the administration and the commerce department over the last three or four years there is a new steel plant in youngstown there is an expansion with u.s. steel which i visited with the ceo last week. there's other steel investment programs. the problem is the - business environments and we are seeing the narrow margins are in large part because of the increased imports and steel products revolving from the government subsidies and unfair trade practices often chinese and sometimes others. if confirmed, would you file a case of wto against the subsidies? >> well, senator, we need to look to the issues and i don't know whether there is a case to be brought at the moment or not. i would say we brought a case against china in the steel sector when they put be oriented

electrical steel duties and inappropriate way to make the case and we are always looking for a way to find mechanisms to deal with unfair trade practices in the trade enforcement law. if there is a case to be brought, they will bring it. >> my fear is that so often the damage by the time we go through this process, if we don't act a little more productively or preemptive, if that is an adverb, the damage to the businesses -- we saw this in the paper industry in southern ohio and all across the paper manufacturing generally where the damage to the industry was so great by the time the wheels of the government and the treated for enforcement could operate the company's probably will never fully recover and hasn't recovered appreciably anyway. i'm hopeful that you will look at this and a bit more productive preemptive way as you

decide this. last, i just wanted to make the invitation i'm sure my colleague from ohio and the finance committee senator portman would like you to come out to ohio and see the plant. i think it's important for the economy and making things and being a leader in the national security to the families that make steel would matter so much and i would end with this. there is a mittal plan and cleveland which is the first time in world history where one person produce 1 ton of steel but it never happened in world history anywhere and it happened first in cleveland ohio. so you have a really efficient domestic steel industry that's under a lot of pressure because of dumping and because of illegal subsidies to chinese steel. >> i look forward to taking that that invitation. thank you. >> thank you, senator. mr. froman, we've heard a lot of

concerns here. all level playing field the property and french and and the enterprises and fairly to get vantage of the u.s. companies and so forth. my question is i know you are going to try to address a lot of this and other matters. what are the limits on your power we get to address this what are the limits? what are the political limits, what are the legal limits and what this preventing it from address in all these issues very expeditiously? you could just categorize what they are and i'm especially interested in the potential legal limits on the actions before we join the wto.

the ability to do so isn't respected and other countries have joined. they join the wto and participate on those disciplines but i think one of them might have to do with when companies go to the product is. what are the limits? i will start first with a legal limits. but can't you do and what can you do? first of all what are the limits? you can do anything, i should start out you can bring any action to any subject brought about and what are the limits? >> that is a great question that it deserves with the dialogue and we benefit greatly cut the u.s. benefits greatly from the

rules based trading system. the wto has the ability to bring unilateral action but it constrains everybody else's ability, too and the mechanisms of the wto have generally been open and fair, and we have aggressively pursue our interest through them. i don't know whether we need additional legal authorities than we currently have to be we need to get out there with our trading partners to build coalitions with other like-minded countries and to do things that help underscore that for the global trading system as a whole it will be better if countries all played by the same rules and that those rules are the sort of rules that undergird the current wto system and that is what we need to do bilaterally with the emerging economies if they play an increasing role in the economy and it's what we hope to do through the transatlantic trade investment partnership, not only in open our markets to each other but work together in the rest of the world to help raise

standards in ipr and other areas. >> i am happy to think through that but i know enough to know that i shouldn't be my own lawyer on this one. >> we need to discuss this and i urge you to think about it. it's my belief and i think it is america's belief and of the members of the committee we have some trade barriers, too and other countries don't have black hats. i think it's true the shade of gray is lighter than the shade of gray in their hats by and large. so the playing field is going up level. do you want other countries to play by the same rules? a lot of countries don't want to do that. they are not as rules based as we are as a country. you know, the founding fathers in the constitution and in the

rights and justice and fairness in the procedure and transparency and the assumption the space countries work with the form of government we have. that isn't true in most other countries that don't have the same foundation. they don't have the same basis. they come from different perspectives. many countries are less process oriented and they are more result oriented. we believe in the rules to be fair. that isn't true with the other countries and they will not be fair because that isn't where they come from and the only way to address those issues in my judgment is to leverage, figured out some way.

if they don't, we have to adjust to another world order where justice and fairness may not be the total number pending. might not be our promisor our assumption of what we are trying to accomplish here. now i am worried about results very much. the americans regard themselves as fair consideration of power from independent judiciary, etc.. we also need results. the world has changed so dramatically the last ten to 15 years. as globalization and the bachelor's and communications technologies and then just it undermines. we have to think a lot differently than we have in the past if our kids and grandkids have the same that we have enjoyed as americans. i am very worried about that and

i know you are, too. we are going to ask follow-up questions in the future. to what have you performed in the areas that they have addressed when. they talked again about this and one of them came back and said we didn't do very much about it and it's not much better really and that's why i asked the question what limits the power? what more do we address so that you have more power with respect to the trading partners to get better results. i just urge you to think about that. it's one of the central questions facing the country it is economically hard to make sure that we are not being taken advantage of by some other

countries and how we make sure they have an even higher quality-of-life. >> i agree completely and i very much look forward to working with you and your colleagues on that. >> i wish you very well. it is a huge challenge. i sometimes think that only the paranoid survive. and i hope you are so that you can help america survived. >> thank you mr. chairman. the hearing is adjourned.

chinese head of state meeting at the annenberg estate. they recently toured the mansion and the ground. >> sunny lands is the estate and they built this as a winter residence, and was completed in 1966 and they lived here until their death in 2002 and in 2,009 psp eight has been referred to as the camp david of the west and that is of course because presidents came here to relax

and to get away from what the hustle and bustle of washington, d.c. during the nm burba lifetime. walter annenberg's felker owned a company called triangle publications incorporated and that company actually published the daily racing form and the philadelphia inquirer, and his father had been involved in the business for decades. his father actually was sent to prison in 1940 for tax evasion, and at that point walter took on the range of the publications, and it was in deep financial problems and he was responsible for introducing a number of new publishing elements that were wildly successful, seventeen magazine was launched in the early 1940's, the first magazine

in america and year out specifically for young women. he put together this idea of tv guide and launched tv guide at a time when there were only 10% of american households who don't televisions. that of course became the most popular magazine in america and had the highest circulation for decades and made the bulk of the fortune of triangle publications. walter annenberg had a genius for recognizing future trends and was able to use his company to get ahead of those trends. he was a delightful hospitable woman who was very typical of her generation. she was the woman behind the man. every off the water would be the person who received the first recognition, and he was the one who certainly was the

businessman whose money funded their lifestyle. walter actually had a speech impediment, and so he practiced every day to make certain that he could form his words and speak clearly. so he was very careful about his language and his presentation. so he was more reserved, and mrs. annenberg was instead more white hard it and engaging in conversationalists. we are in the atrium of the house. this is there room you would have seen if he were welcomed. presidents, the queen of england, major political figures, great celebrities can through the front doors. this space was used for over sections of the new year's eve parties that happened right here. much of the furniture in this space was removed and was set so

it could have 110 people. jimmy stewart might sit up the piano and play. bob hope entertained and frank sinatra of course. walter annenberg knew him going back to the 1930's so they had a really long personal history. and when ronald reagan was an actor in hollywood, so over time that relationship that was deep and personal continued, and when ronald reagan was governor of the state of california, he came here and then of course after he had been elected president he continued to come here and he came here every year for 18 of the new year's eve parties. and so that was a moment everywhere where the government

can together in a large social gathering. other whites the entertained in small groups. the ann birds would invite these individuals who were their friends to spend time here and then they would fully determine who those friends might enjoy meeting and create these kind of connections that perhaps hadn't existed before. they used these elements of the market architecture to create a space that was in a formal that could slow from place to place and that at the same time took a huge space. this a 6,400 square feet which is the size of five average american homes in the 1960's and yet it doesn't feel overwhelming. it has a very comfortable kind of quality to it and that is the combination of the architecture

and then the furniture groupings william haines designed. it was the room of memories. a very special room at sunny land. so the memory was actually named that by the ann burgers to the to -- ann bird. they made the determination they wanted to keep the memory of the important friends and family and other individuals who they had come in contact with during their lifetime. so there's actually a portrait of winston churchill signed by winston churchill. he met walter annenberg in the week 1940's. we have a photograph of the annenbergs with prince charles, this one from 1986. of course they had a really important relationship with the family so you see walter and queen elisabeth because he was

the ambassador to the court of st. james and lived in london for five years they continued for the rest of their life to correspond and connect. you see walter getting out of the carriage as he was going to be presented in london to the queen as he took on the job of ambassador. down here you see a photograph of bush signed with lasting appreciation, friendship, too. here is george w. bush much later in their life. the clintons with gratitude for your friendship with hillary rodham clinton and bill clinton. but this wall is full of individual memory is that record

numerous conversations over decades in the annenbergs life. clearly those individuals who were important to them over time made it through this wall switches and generally individual the new only and interactive with only once but rather people who became their friends. in addition, we have a photograph of ronald reagan sitting in this chair looking at the television in this cabinet in 1983 when gorbachev was speaking to the american people about nuclear disarmament, and at the same time, ronald reagan's speech to the soviet people was being broadcast. this important topic was critical in changing world

political dynamics, and for us it makes this a very important historical spot. the annenbergs were definitely republicans and lifelong republicans. however, they crossed the aisle, and some actually walter annenberg had the philadelphia inquirer endorsed lyndon johnson when he ran for president. so he didn't only support republicans and the republicans he did support tended to be more centrist in relation to what we might see today. this is the yellow room and it's one of the five historic rooms at sunny land and this was the presidential room so they always stayed in this room and it has a beautiful room.

so did margaret thatcher. so, really a prestigious list of room residence, and like all of their rooms in the guest wing this was differentiated by color. we have a pink room and a green and blue along with this room and actually if you were staying here, you would have color coordinated jellybeans and specially selected books to read. this room is one of the earliest room satchel we also had twin beds. we have it set up today. today if you visit sunnylands as a participant in one of our retrieves we actually change this and provide current retreat participants with king size beds, more comfortable with contemporary ones and all of that, but you would have the

opportunity to join that list of important people who had slept here before you. they made a gift of this property to the nation for the purpose of continuing its history by dynamic and relevant conversations among the people today. an interesting mission it is both exclusive and inclusive. so our property is being preserved and maintained so that it can be used by a relatively small number of people for these high level retreats, but at the same time it is being preserved and maintained so that it can be open to the public for a broad public access so that they can appreciate the history of the place and experience the uniqueness and the beauty of sunnylands.

>> in order to raise money i filed an application of the irs in january 2011 to obtain 501 seat three status as an educational organization. as of today, i had been waiting for 29 months without status. >> many of the agents and agencies of the federal government do not understand that they are servants of the people. they think they are our masters and they are mistaken. i'm not interested in scoring political points. i want to protect and preserve the america that i grew up in, the american people across oceans and risk their life to become part of and i am terrified it's slipping away. thank you. >> thank you so much. [applause] the purpose of a c3e corsi for tax exemption is to enable easier promotion of public

goods, not political work to be it's the responsibility of the irs to determine which groups are choosing the correct exemption status and which are trying to manipulate the system to avoid taxes and high political organizations and campaign donors. as we mentioned president obama is on the road to a troubling to southern california meeting with a chinese head of state. we got a preview of that meeting on this morning's washington journal. >> host: in california today

president obama and the chinese president will meet for two days on what is being labeled a short sleeve summit that will take place at the annenberg center located at sunnylands in california. picture of it today in the financial times. the short sleeves indicating that it's been to be more casual and nature but a conversation between the two leaders about a variety of topics. we are focusing on these topics over the next two segments on this morning's programs. cheng li from the brookings institution joins us and is the fellows senior. >> what are the leaders and both countries looking for at this summit? >> guest: i think there are three levels of objectives. first is a concrete issue, and especially north korea and cybersecurity and also economic relationship between the united states and china. for china, they are also concerned about the readiness security in the south china sea

and particularly the american position in these areas. but also, the second label is the personal relationship where they can build a in a mutual respect and understanding and maybe even cost intervention. the third level is a strategy of thinking that both leaders want to discuss with the chinese call a new type or a new kind of power relationship which means it should be operating rather than -- said these are the three levels of objectives in their mind and the country's mind. >> aside from the specifics, how does the economy in the two countries factor into the nature of the discussion? if there is a factor at all. >> the most important concern for both leaders because both countries face economic challenges and for china particularly and the trade

marketing access and also another issue areas and there are the engines of the economy and this should be the spotlight in the entire world. >> so you said the chinese economy is slowing down. why is that? >> guest: it hurts china's export because of the structural change and the export economy and heavily-armed labor that what was coming to an end and now they want to transfer into the service sector oriented economy which has been very painful. and still, the method of consumption is not up. so the fund raising on that goes up and because particularly the college graduates cannot find jobs so plus a possible property bubble and also very serious problem of the state's own enterprises is a kind of

monopoly for the chinese market development. >> a meeting between president and chinese president today, the chinese president today will talk about those issues in the economy, xi jinping. two days of meetings in california but starts today continuing to tomorrow. if you have questions about the chinese economy especially as it plays into relations with the united states and even discussions that will take place today in california here is how you can join, 202-58-5381 for republicans. 28,258,538,880 for democrats. (282)585-3882 for independent. if you want to send a tweet you can do so at c-spanwj and you can e-mail c-span's at mackall or. >> guest: they are very much

concerned about the intellectual property rights and the protectionism and the intellectual property rights are part of the sires security issue because the industrial knowledge and at the same time china is also in the tpp transpacific partnership. they have a block that excludes china and the free trade so they want to know what is the intention for the united states and the united states makes a very clear point that institution welcomes china if they fall into the normal standards and for the free trade agreement. >> the status of the tpp as you describe it? >> at the moment they are a member and there will be some discussions and the door is open but at the same time china led the organization that excludes the united states participation. so both leaders have things to

discount. also for the particular chinese investment it would be blocked by the interest group or congress for the egg united states also and the american companies accept for china's market and protectionism by the policy to the state owned enterprises. but at the same time it's a very important reform program and the discussion in the economic team it is a very market oriented plan and also the deregulation and a number of other issues that will have strong implications for the foreign companies particularly american companies. >> host: one of the things that comes up is trade deficits the united states has with china, 315 billion highlighted in 2002, dow was up from two wondered 95 billion in 2011. then if you go back as far as

this year, april of this year 93 billion so it is an imbalance of who sends what to whom. >> guest: i think it is getting a little better. for china as they argued that if you can lift the ban for technology transfer it would be more balanced so this is the chinese position. >> the first call on the topic, stanley is from stanley north carolina on the republican line. hello. >> caller: how are you doing this morning thank you for taking my call. i want to ask the gentleman in front we have a codependent symbiotic relationship with china because we have put ourselves in the position that the largest segment of our economy is retail and we cannot compete with china and india because of the cost of the tremendous gap between the cost of labor but what is hurting the

ability to have a much better relationship between the countries is this absolute disregard for the role of law violating a patent and spy in on us, stealing technology and everything else, what can we do to continue to grow together instead of not trusting each other and creating issues with not only the consumers and not wanting to try to beat to buy chinese consumers but it's not good for both countries. >> guest: i agree with your assessment. the property rights issues were never made issues.

they understand the importance of that issue and they bring certain facilities because the local government in their own interest. but we also should know that china improves because 90% of the disputes actually occurred so they emphasize the rolph law so china has the increase of labor cost and the manufacturing industry.

>> meanwhile the intellectual property rights we make sure the business opportunity in the senate to raise that issue very seriously with the chinese leaders. >> host: in tennessee on the republican line. >> caller: good morning. i would like to speak to dr. li. >> host: you are on a. >> caller: mr. li, and questioning the reason -- aye chollet born in germany. i've been here 67 years. but we were always taught that the chinese people are so far in advance or have been forever. why on earth would you stoop down and steel of secrets that our people here in america have worked so hard to get? why do you do that? i don't think that is very nice or professional. i mean, you have enough people that you can find out your own

industry of things. >> guest: first, i am chinese but i now chinese-american as i've become an american and citizen years ago. i do not want to speak to china but the issues you raised to show chinese perspective three etc sycophant intellectual property rights to a certain extent is the interest not just of america but increasingly also for the emerging markets such as china. now the western media makes sense about the security violations. it touched a very important part of our american lives. privacy, financial security and physical safety. these are all very important. but we should also put into perspective that china is not

the only country that has been doing this kind of thing. china may be left behind some offer the cybersecurity is a global issue and china could be so they have some and think this is an opportunity for the leaders in the summit in china and the united states to discuss that issue. this could be the act of war. so we need to establish a code of behavior to deal with this challenge. it's a very neutral lynch and issue putting the leaders and the public demand would be much

better addressed. if we only point a finger to china to a certain extent they argue it is unfair and out of the context. >> host: is there any way that xi jinping would be open to these rules? >> guest: it's very unlikely because china is a major country and could also attacked is a net in the extent and certain things are sponsored by the military building as required but it could be individual power. so i think that the chinese leadership makes a strong statement. this meeting we do not expect the agreement and the announcement but that certainly is on the top of the agenda for the discussion and will lead to some important cooperations.

>> host: that meeting takes place today and tomorrow at a resort and discussions of a wide range of topics the economy being one and know what reza does it the issues and others and that is the driving force for talking about the segments. chicago illinois, democrats line. >> caller: we've are entitled to know everything and they want to know everything so that they can tell everybody to be the that's the way it is. if you don't want anybody to know about it, don't let it happen. there are no secrets. >> host: michael, wilmington vermont. >> caller: good morning. i would like to comment there are certain obvious differences i see americans involved in the war for 60 years and china

controlled the government and china, the corporations are controlled by the government. whereas the orientation in america accept corporate profits the chinese and economic development to expand their influence american uses development at the point of a gun. they have every nation that can do to get me an opportunity. thank you. >> how china goes as far as development is concerned. >> guest: i think the chinese people probably believe that, you know, and the past 30 years china wasn't in the war for the united states has been for many

decades and china certainly benefits in the economic integration in what we call the globalization. they understand that this is not fair and creates a sense of fear rather than to really talk about how to find a way in the international code of conduct and how to prevent whether it be the nation state or individuals to take advantage of this new area which is so powerful and so important for the life and safety and the other aspects. so, i think the caller raises a question about looking at this issue >> the nature of the economy is changing what does that mean for the worker in china?

>> guest: the previous opportunities would become more difficult because of the labor cost increase, because of the side effect of the economic miracle also becomes obvious including the economic disparity, corruption, environmental pollution or so they need to address these issues so economic growth is important. the quality of growth also becomes a major concern in china when you have such a provision in beijing. so what is the point to pursue that when people are biting because of pollution or this kind of related disease. so the chinese are also searching for the development and so this is the status of the chinese people and they joined

the middle class lifestyle and the social justice for the world law in the public discourse >> host: what is the wage differential between the u.s. and china? >> guest: it's still a huge. the data isn't reliable but we sure that the purchasing power and the living standard etc and the huge gap but although the middle class if we look at in beijing and a lifestyle and the income reduced significantly as we look at it in the country was 1.4 billion people is a huge gap. it is relatively low the

property price increased dramatically in the major cities. >> host: here is meridian mississippi. >> caller: i was just thinking god help us. i wish it were donald trump or ronald negotiating with this man and not this like-minded american hating socialist president obama. by the way i love what i bought from china. >> host: let's hear next from the republican line. >> caller: good morning. my name is kino to the body as a citizen ought to offer two items on the international discussion between china and the united states that should be put on the agenda. one is making a good life and interesting life for young people in the country so we have some young people that want to work in agriculture instead of the allure of the city and the

electronic gadgets. we work together to develop good programs for our young people and we want france to work with them on that, to mexican be the leader for europe to read the you're the leader in the united states for north and south america. anyway the other item is to help our citizens understand how much government are making guns and how much they are producing better. the economic question of guns and butter well, ralph nader has a new book called the 17 solutions and we want citizens to ask questions about how much of our money is going into making butter and how much is making guns and we want the citizens of china to understand that citizens can inquire and ask questions and ask for putting things on the record. >> guest: this is an interesting concern about the budget increase over the some

past 20 years. president obama for a second term to cut the military budget about the pivotal rebalancing in the iraq war, the military location to the asia-pacific particularly the east china sea and south china sea has the military encirclement and its allies like japan and a country like the philippines. they think it is a u.s.-led deliberate effort. so this is also an opportunity for china to experience the rebalancing to the asia policy and hopefully also a bylaw rather than a new round of the arms race. >> host: we will talk about that on the next segment, questions on currency saying

what is the effect of the currency that we are having in china cracks >> guest: when they believe it is the currency but of course they do not define that way in the past couple years. they were a significant over the past five, six years and continue doing that in the base. for the same time as a china exporter slowed down with a tremendous burden for the chinese government to continue to do that because as i mentioned there is a high percentage of students when the export slowdown so the chinese government have the social stability but for long run if their interest makes the currency convertible in in the

international currency but still takes a few more years to compete in that process. >> host: we had a previous legislator that represented the co-chair of the manufacturing caucus talk about the idea of what they do with the currency and how that affects the united states and he gave his explanation. >> you can go into the market and keep your price at a certain level and the chinese have done that to keep their price of the currency artificially low so when the export products to the united states they are a lot cheaper than they normally should be so for example we have a company in our area in eastern ohio. so the chinese make a similar product. the final product lands on the shores of the united states it's the same cost as just the raw material cost of the american

companies. that's how significant of an advantage you can gain by manipulating your currency so by forcing the chinese to make sure the currency reflect the actual market value of the currency would level the playing field and help support the u.s. manufacturing. >> host: so the likelihood of the action on the front is? >> guest: it would be a slow in incremental rather than the major job like the 20% appreciate. this will be a disaster for china and also we heard the u.s. if the chinese economy collapsed it would be the desire for everyone including the united states economy. so they purchase so much in the united states. so again, i also think the currency is the right way to go. >> host: hello. >> guest: >> caller: how are you today? everyone seems to forget china

is a communist country. the chinese corporations are owned by the government and that is my comment. >> host: how does that play into the economy on a larger scale? >> caller: we need to start buying need in america only. >> host: with smithfield here in virginia, this was a company that brought it out but is there any connection? >> caller: >> guest: the american companies are happy to see the development. first of all, i don't think it's right to call china -- it is a one-party rule but the chinese economy becomes diversified more than 50% of the state owned enterprises, only a small portion of the chinese economy.

and to a certain extent american companies were presented in china. now this would emerge. because of china's own consent and criticism, its own companies and of lack of safety love to merge with the foreign companies bid in this case the meat so you will see more development in that area. >> host: if you look at the mouth of the purchases from the chinese, energy being a big factor, 3 million, entertainment and real-estate about 3 billion as well and in the automotive industry about 375 million. and then it goes to the other categories as well. >> guest: this is good news for the many companies. this is part of the economic globalization but at the same time we should make sure that they need the international standards for the international norm on the trade agreement and on the better hand, i welcome the development for china to be part of a solution.

china is not the problem and sometimes we also need to look at the other problems for the slowdown for the year autozone and -- eurozone and it's unfair to blame china and to a certain extent in the community by and large they will do business. >> host: washington, d.c. democrat line. good morning. go ahead. >> caller: yes, good morning. thank you for taking my call. mr. cheng li, i've been listening to you for about an hour. my call is about our trade agreement that we have with china. it is lopsided and i don't think we had to do that. that is the cause of the right of china. as far as you being a communist country, we get into this name calling thing like the lady

called it this and that and the other. this is a reflection on our country. i was born and raised here in america is proud of america. to be an american citizen. and i do know that we are an immigrant country. what i am saying is i think that we should be fair with the currency. and the trade policies. so, china has to come forward with the honesty and put these things on the table here and that is all i have to say. what you have to say about that? i would agree with mccaul's john arrow assessment. i think that china contributes to the consumption of the united states because they know that price and it is an expensive product and wal-mart and kmart but now also it contributes to the other prices at the high end of the products and putting

technology intensive products. so that is a major development and without china's contributions, the price in the united states will be very, very high but now china has a council to invest in the different parts of the united states that can also provide the jobs, etc.. ..

energy, environment. fiscal strong implication to global economy particularly for the country like in europe and the united. >> host: bob from maryland. joining us on the republican line. hello. >> caller: hello. good morning. i had a couple of questions, does the president of china realize -- he does it because he's the leader so he can stop it. second, is there social unrest between the ruling class and the other people in china? because it seems i heard that the class are pretty corrupt, and they get all the -- [inaudible] all the car -- [inaudible]

>> guest: i think this is a human rights issue. the new president's position on that is unclear, because he just become the top leader, you know, a few months ago. and social unrest. yes, it's not a secret. it happens all the time across the country. 80,000 social protests, which means fifty people or more. that means that almost 500 per day. so there's a series of things, you know, also the corruption that has become a serious issue in china [inaudible] at the top of leader of his corruption and his corruption

and also the -- [inaudible] review the series of corruption in china, so also the consultation between them. now it's an opportunity for president obama to argue that, you know, the issue not just crack down on media censorship or approach. only through the internet war the chinese for the system. you can achieve long-term ability for the country which means that democracy. >> host: our guest with the brookings institution. the senior fellow. it's cheng li. talk about the way the summit is designed in california. very casual? not a lot of formal activity.

>> guest: that's right. conducive tended environment to establish kind of mutual respect and understanding and maybe even friendship. both we have several hour including dinner tonight, breakfast tomorrow, the result and so it's really a kind of a extraordinary, which obviously comes from so much time with the u.s. president. >> host: why do you think they did it this way? >> >> guest: it's on purpose. they have a different permit. they don't have to have -- [inaudible] you don't want to take a responsibility and particularly the president hue dinner with president obama he brought two other senior leader. he doesn't want to -- [inaudible]

both have [inaudible] volleyball and soccer. obama basketball and golf. they are confident among themselves. they also face serious domestic challenges. so outgoing personality, you know, provides process environment, you know, very nicely when it will be -- [inaudible] and forecast and it's a good opportunity. it's conducive environment to have a discussion. we hope that -- this type of relationship despite an disagreement we should emphasize the common ground and emphasize that if there's a crisis not to the point of -- not use of military force but peaceful mean and deal with the dispute. at the same time we have a common interest.

the economy and the terrorist. >> guest: if it the event goes well. what is the logical next step between the two leaders? ? >> guest: in the coming months there will be more dialogue in the low level the minister level and the minister level. they can produce a real result and also that's china's and create a jobs and improve for consumption and -- i think countries have create an tremendous opportunity and help china to implement a real banking system that have a strong implications for american business community especially

the banking industry. >> host: joe on the democrat line. >> caller: hi. can you hear me? >> host: you're fine, sir. >> caller: i'll try to be brief. to focus my thoughts. basically -- [inaudible] my seasonal son-had in-law went to china a few years ago -- [inaudible] i was impressed by shanghai, beijing, and the other cities. i couldn't say anything bad. we should stop looking for enemy and look for friends. china should be and is our trading partner and -- [inaudible]

is concerned we wouldn't like to have china warships off -- [inaudible] why should we being have -- [inaudible] in the south china sea it is provocative. >> host: thank you. >> guest: i love the lion. we want to seek friend rather than enemy. let's face it. are we going have a war with china? if threatens us we would be working vigorously to defend the region and the world. but statement we should not lead by fear. we should create opportunity we cannot afford the war. it's extremely expensive. and fighting for what? we can do peaceful mean to make china change. [inaudible] and previously the economic -- [inaudible] benefit chinese people also benefit the entire world it's about the political reform and

winning china. in the next decade or so. we hope they become a responsible stakeholder. we should by all means avoid a confrontation or major war. in north korea, we see china express its own interest and also determination to make sure that korean peninsula is free. we welcome china's important role in that era. this would also be important part of an decision. >> host: the democracy line. hi. >> caller: good morning. thank you for c-span. i wondered if your guest could make a comment on something i've been hearing. in the course of my work, a lot of my friends who work in economic community basically describe the between the u.s. and the china as a battle between the democratic and nondemocratic capitalism and i'm

amazed at how many are very much saying they are betting on nondemocratic to win. and i just wondered if your guest could comment on that. because it seems to me sense if you go from my point of view and my work. i would like to hear your comment. >> guest: china -- [inaudible] not democratic capitalism. it's a state capitalism. it's a crony capitalism. not just china but many other countries. the government sponsored -- monopolize industries. the market like telecommunication and so -- [inaudible] and development. but not only the company but also put china's private company, the private sector we should very important and dynamic in the 1990s and but in

a past five years also become a shrink, shrink because of state of monopoly. the state bank in the telecommunication, oil, you know, railroad,th. so the agenda for the top leaders and the -- is change that to make the market force. i think -- [inaudible] dynamic again for the money -- at the same time china needs to change the banking system to make it a real banking system rather than only provide -- prize. enterprise. it's an open door for foreign competition. this is the stage we enter. we don't know whether china could be successful. but likely they understand unless until push for it. otherwise it will be on the rise. >> host: the first time the

president of the china president met president obama they had a formal meeting at the white house that took place earlier. the two gentleman will meet in a less formal fashion started today in california for a two of -day summit to talk about issues we have been addressing and will address in this program. there is a picture of february from last year. as you look tat. this is eugene joining us independent line. >> hi. grk good morning. pric and contains -- [inaudible] how we can make the american economy more stable and the fluxuation on the stock market with the s&p and dow and nasdaq. is there a way we can become the most powerful financial country

in the world? can we do that? >> host: the jobs report just come out. it reported 175,000 jobs were added in may. the unemployment rate has risen to 7.6%. mr. li? >> guest: u.s. is still the largest economy in the world. our financial institutions are very, very powerful and you see the rise of emerge market, and i think countries not only china but others india, brazil, russia. they are here for the global economy increase dramatically over the past two or three decades. that's a trend you cannot change. that doesn't tell us the fundamental change of your global economic landscape. particularly the -- the five

largest middle class market. china is not number one. india is number two. japan number four. indonesia number five. four are located in southeast china. that tells you dramatic change of the global economic landscape . the u.s. should understand there's a trend. but at the same time should take advantage of our technology throughout the financial institution, through our soft power. and also human resources and, et. cetera. in that area, in this area the u.s. still has -- there's a tremendous move to make manufacturing back to the united and also high competition in the high -- human -- and the crowd

call collusion. these are all potentially could be very important. they will not change so much on the job. so therefore, the manufacturing industry return to the united can provide the more jobs. welcoming very positive things coming back. >> host: study china for that organization. thank you for your time. >> thank you. in order to raise money i file ab application with the irs in january of 2011. seeking, contain 501(c)(3) status an educational organization. as of today, i have been waiting for 29 months without status. >> many of the agents and agencies of the federal government do not understand that they are servant of the people. they think they are our masters and they are mistaken. i'm not interested in scoring political points. i want to protect and preserve

the america that i grew up in. the america that people cross oceans and risk their lives to become a part of. and i'm terrified it is slipping away. thank you. [applause] the purpose is to enable easier promotion of public good. not political work. it is the responsibility of the irs and to determine which groups are choosing the correct exempt status, and which are trying to manipulate the system to avoid taxes and high political organizations and campaign donors. this weekend on c-span house ways & means hears from tea party members on irs targeting of the group. saturday at 10:00 a.m. eastern. also this weekend on c-span2, booktv live coverage of the "chicago tribune" printer's row lit fest.

on american history tv on c-span 3, the life and legacy of civil rights leader. sunday at 5:00. here is what ahead on c-span2. more about u.s. china relations. and serve continuously since 1955. born in 1928 chaired the house energy and commerce committee twice during the ten year. and cast over 25,000 votes in that time. president obama marked out indication today saying, john is always worked tireless for the people of his beloved michigan and working families. he helped some of the most important laws of the last half century. as president obama travels to southern california today to

meet with the chinese head of state. we have a preview on today's washington journal. turning our topic to national interest. do you expect the issues to come up between the two gentleman. what is expected to be discussed? >> guest: i don't think there's any question it's going to be a hot topic. some of the things that will certainly be on the agenda to begin is cyber espionage. basically at this point we had have had lot of stories about china breaking to american defense programs. engaging in espionage. the chinese rebutted it saying we're being hacked and cyber assaulted. and many of those are coming from the united states.

in addition, there's almost certainly going to be on the agenda north korea. some of the territorial dispute that china has, for example, with japan, south china sea, and finally transnational issues. terrorism, and along the lines will be the issue of mutual respect as a chinese put for each of the core interest. >> host: one of the issues that came up leading to this or described in the media there's a shift happening when it comes to asia and the asia-pacific from the administration. the idea that in the wake of the iraq and afghanistan conflict winding down. where should america be prioritizing the resources? and given the economic importance of asia, give the security implications of asia where there are multiple nuclear power, north korea, that basically the united states

should shift focus to that region. let me emphasize here that the administration is not simply talked about the military. that's obviously a big piece of it. also diplomatic even trade. the transpacific partnership. there's multiple pieces and in play as the u.s. basically tries to reemphasize the asia connections as well as its traditional. glois and china perceive it is as? >> guest: as an effort to contain china. perceive it is as an effort to limit china's capability and counter china's rise. >> host: is that a fair assessment? >> guest: i would china is -- paranoid is perhaps a too strong word. they fail to recognize that their actions have consequences. when they are engaged in disputes with maritime neighbors there is a reaction. i don't think there is a

scheming american president looking to contain china so much as -- push-pull reaction to china's increasing assertivenesses. >> host: we'll talk about the issue with our guest. if you want ask questions. if want to reach us on e-mail and twitter. you can reach us by one of the two. when it comes to the china's president, what is his philosophy when it comeses to military security issues for his own country? >> guest: he's going to be continuing the seven policies that the predecessors began, which is a steady modernization of the chinese military. it's not your father's pla.

it's not a military that believes in quantity over quality. they are good students of foreign wars, especially america's wars. they understand that today wars are won in large part by technology and high quality troops. that requires investment. and so he'll continue to invest significant resource -- double digit increase in the defense budget every year for the past twenty years. at the same time, i think it's important to note that china is not out looking for a fight. the chinese are very enfattic how they need a stable international benefit. as china's military modernized what we are seeing as more and more willing tons take risks in the belief that doing so furthers national security. >> host: and modernize when it comes to military. what is the focus? where is it concentrated? >> caller: one of the stunning

things is how broad based the military modernization has been. we have seen a new aircraft carrier, two new fighters, cyber warfare, a range of space capability. new cargo aircraft, it's -- at this point there's almost no part of the military that isn't enjoying a boom times budgetarily and in term of new equipment. >> host: and the justification from china's perspective would be? >> guest: they are the number economy in the world. they have global economic interest and the right to defend them. and the military capabilities require china to expand the military capacity. >> do they have military background at all? it he spent a brief amount of time essentially working as an

assistant to a general. he himself never singed in the military. continuing a pattern we see for the several chinese leaders. >> host: aside from the military aspect, a lot of discussions are about cybersecurity. is there a sense that the two gentleman will come some type of understanding to best approach the issue from both countries? >> guest: given that china has consistently denied any responsibility for cyber espionage on the part, i think it's going to be trying to simply get on the same sheet of paper. never mind move forward is going difficult. i do think both sides are concerned about cyber. in term of specific actions and in particular whether or not you can control your own resources and efforts on the chinese part, i think that is going to be a hard road. >> host: exactly the topics to be addressed or at least the

perspective we brought up are the two dais of meeting. what is expected to be discussed? >> guest: i think we'll see on the cyber aspect in particular an attempt by both sides to lay out an agenda for some kind of working group which is already talk about of secretary defense hague. and secretary of state kerry. north korea in particular, whether or not their program will proceed forward, and whether or not there's anything china can do about it or what the united states can do about it. and hopefully more discussion about just broader transparency issue. >> host: up first is denise. if you want to ask about china's military and security issues. the number is on your screen 202-585-3881. she's from pennsylvania. on the democratic line. go ahead. >> caller: hi.

i'm calling because i'm wondering about the security with the we have the heritage and cato, and this is a 501(c)(4) heritage foundation. that's republican. i'm curious as to how they have their information on national security? >> guest: a small 501(c)(3). there's a significant difference there. if you're asking how do the chinese obtain information about the security. a lot by reading our media. watching c-span. they are observers of the military exercise and the war. there were chinese correspondents embedded with the u.s. forces during the march to baghdad.

you can be sure the report were being read by the top chinese military. they invited them to participate in the tbowrt. they have accepted. that will be the first time we have a major exercise involving them. >> host: rim of the pacific is one of the largest multinational exercise in the world and involves u.s. and most of the pacific allies. australia, japan, philippines. china has, in the past, never been invited to participate. in 2014 -- they happen every other year. the u.s. invited china to send more forces to play with the other folks in the large exercise. previously the u.s. and china have had what are called passing exercise. and search and rescue exercises. it's dummy over the side.

you basically try to find as throw it was a man overboard. it was a low level source of things. it's a different and higher level exercise. thank you for c-span. with the military growth and the chinese trying to -- [inaudible] take over quietly. >> host: thank you for the question. i don't think we are sighing china trying to take over america without buying it under it. they invest in part because they have a massive balance payment surplus and frankly there's only

two places they can put it. they can build the world's large estimate res and and liquidity that can handle. or enforce. you have to keep in mind that the chinese try to sell it. somebody has to buy it. either other people buy it it's a wash. you have to discount or we buy it back at discount off the familiar. we wind up winning. >> host: the previous guest said china's economy are changing. is there relationship -- there is investment in the military does it continue even though the -- it's not quite a full blown

recession. if this trend continues, if the chinese slows down for the next five years >> host: don from california. republican line. good morning thank you for holding on. ged. >> caller: hi. my name is john. i'm concerned about the chinese to buy a processing plant in the united states. it's to provide cheaper products for the chinese national in china. i do not see the cost benefit there of processing food in the united states and shipping it to china, and instead as ab opportunity for the chinese to obtain a footprint in the united

states and further their political agenda i'm concerned about the safety of the workers and the food that is distributed within the united. considering the fire that destroyed a chicken processing plant in china and killed 112 workers there. so how is this ready to benefit china and the united states than it is definitely a security issue. >> well, with regards to worker safety and food product safety. and american a factory in the united states still has to abide by the american laws, state laws, and the like. in terms of china's interest in buying a company like smithfield. the thing to keep in mind that

china -- their leadership is concerned about the food security. in two ways. one is access to food, and smithfield and other western producers are some of the most efficient in the world. but also product safety, and in that regard, the hope is that by purchasing an american company they improve chinese levels of food safety. certainly the potential for political influence by affecting workers and things are something to keep an eye on. that's something that hopefully the federal election commission and other keep a close eye on the chinese contribution, chinese effort to influence workers abroad. the type of purchase through the security lens? >> guest: we do. there's foreign investment in the united. they review major purchases something like smithfield what? are looked at. typically it's more on high-tech concerns, oil companies,

computer company. >> host: you can expand on it. chuck said you heard a lot about military and cyber. would north korea be on the agenda? >> guest: absolutely on two count. one, north korea's nuclear missile programs which threatens south korea, japan, american interests. so we're talking american allies as well as the u.s. north korea has an active cyber program. even though they never get a chance to to go on the internet. there are dead calletted government and military universities to do cyber hacking. how does the recent revelation about the nsa the intelligence gathering, does that under at least a current there as far as discussions we have or the two gentleman will have in california about cyber issues? >> i think in covers it's a scandal. it's going to be something that the chinese are paying attention to. this is going to affect how much

influence how strong a president they think president obama is. a president who is seen as being dogged by a bunch of scandals is someone that i think the chinese will try to exploit and take advantage of it. his attention will be focused at home rather than abroad. >> host: philadelphia, pennsylvania up next. milton next. how are you? >> caller: good morning. my main concern. i agree with president obama's pivot so much from the middle east to asia. he announced a couple of months ago. i see china as a military threat to the united states and particular when it comes to taiwan. i don't know how we are going -- [inaudible] eventually they want to reach out and take taiwan back. that's one of the thing i fear. how are we going react to that as well. >> host: can you explain the issue before responding. >> guest: the taiwan issue involves taiwan is currently ruled considered the republican of china. they are the losing side of the civil war that ended in 199 --

1949. we recognize china in 1979. we passed the twine commitment act. a legal deployment provide for the security of taiwan. and that was still on the book. it's basis for things like maintaining a american institute de facto embassy as well as on sales. china is not very happy about this. it is an unresolved issue they consider territorial issue. taiwan is part of china from beijing's perspective. something that we don't agree with. the american military commitment in the western pacific is aimed at showing our allies and friends like taiwan. the question that caller posed is one specific command pentagon and others are worried about all the time. because taiwan is the biggest flash point.

we and the chinese rub up against each other. considered the most likely place if there were a war between the two countries. it would be over taiwan. our military modernization and capability are in part oriented making sure china is dee territorial-typed. we sphwhrois when it comes to security in a region nam sense. who is china's friends? >> china doesn't have that many friends. north korea, an economic basket case and irresponsible player. pakistan is probably oldest friend. it used to be aligned with burma, that's changed. the we burmese government has taken over. it has a lot of influence over cambodia. compared with america's allies, south korea, japan, ty land, australia ya. the philippines, we have bigger

economy, more sophisticated military. and frankly, happier countries on our side. >> host: with china's relationship goes? >> russia and china are aligned. they often agree with each others on things such as syria. neither wants to see the syrian government fall. they are both align that want to keep the u.s. out of central asia. they are also deeply suspicious of each over. part goes back to history. there was a siphon split. which left a baste taste in their mouth. and russia's population is cropping. they look to china with the huge population as basically a potential spill over to russia territory. >> host: dean looks at security issues especially asia. our guest as we continue our conversation in light of the summit in california. buys on the independent line. good morning.

>> caller: [inaudible] >> host: ged. >> caller: thank you. i was asking why china and a lot of surrounding countries are pulling out of u.s. dollar as if it's about to collapse. >> host: thank you, caller. sphwhrg actually i think that's a lot more hype than it is reality. at this point in time, for example, china has yet to allow the currency to float free lie. that would be pulling out. they continue to set it, i think it's about $6.6 to the dollar. essential that means that china's currency is a surrogate in some ways for the dollar. it's locked in. it's not allowed to -- if you take look at japan and south korea. the countries are hardly pulling out of the dollar as reserve currency. what you're seeing is china and australia and russia are

agreeing their mutual trade doesn't have to be conducted through the dollar as long as it's fixed all you're doing is removing an interimmediate step. it's tied to the dollar. eventually they want currency to stand alone. at some point that's what we should consider. as long as our deficit out of control i think it's more likely with each passing day. >> host: a picture of their aircraft carrier. why is it significant? >> guest: until recently china was the only member that had no aircraft carrier. for the chinese navy to achieve it is a significant step forward in the military modernization. another piece is that china is confronted by a lot of maritime powers. japan, taiwan, and so carrier provides them with additional capabilities to counter them. and third of all, as china's

global interest expand, a carrier provides china with a ability to project power away from the shores. backedbacked with 36,000 people from libya when libya situation der or it your rated. they had to do it with no air cover. in a future situation, in africa and middle east a chips -- it's been undergoing trial for the past year. they have been learning how to drive it. >> host: i thought it was a -- [inaudible conversations] >> guest: it's through a number of different hands. that's one of the impressive things. it was basically a -- a lot of stuff on there electronic are installed by the chinese.

who has been teaching them? that's a good question. some reports show brazil which has an aircraft conversation. they probably tried to hire people from other countries russia or other places. i suspect there's a certain amount of trial and error on their own. >> host: in new york up next. on the democrats line. hello. >> caller: thank you so much. my question is given the fact that china is military -- i'm wondered how real is it -- [inaudible] that china possibility to take over the superpower? i think at 2025 we are looking at the situation where china's economy in term of gross domestic product may be the largest in the world possibly.

it depends on a couple of things including whether or not china economic engages in the economic reform. which we have seat peter out over the past ten years. it's part of the reason why the economy is slowing. another piece to this is actually chinese demographic. they are hard believe beginning to run low onley boar. because the population is growing older. in fact one of the things the other leaders are much worried about is the perspective of china growing old before it grows rich. that combination of factors try top the u.s. in determine of gdp. it may not. if it doesn't, in that case there's a possibility that china may never catch up with the united. >> have a call from china. john, independent line. hello. >> caller: hello. greetings. good morning. >> guest: good morning. >> caller: thank you so much for c-span. my wife and i have been living

in china for twenty years. we work in the field of vegetation. i would encourage americans to dig a little deeper to do more homework and not be swayed by sen sessionallizing -- because the truth is more positive than often we hear in the horror stories. >> host: how -- [inaudible] >> host: hello. ged. as far as the truth specifically. give an example. >> caller: well, you know, people are afraid of the constitution. but the future belongs to people who learn to cooperate together. and the founding fathers, when were they were forming the 13 colonies, the rich were afraid to connect with the poor. whether they did they became

very strong. i think we have a similar situation with china and u.s. it's not a competitor. it's a cooperator. and i think that is what is the in heart of most people on both countries. >> host: what is the perception to of america to the average china? >> caller: it's mixed. generally quite positive. there are others that wonder why the military is so strong and make them worry. in the heart of most chinese people, they have a positive attitude and opinion about america. they don't think they are perfect. theyed a hire their efforts. >> host: what is the average perception of the government? >> caller: it's much more positive than often you hear in the u.s. press. they are not ignorant people. they see the problem and want to

work on them. but if you stop and think that china has the most populated nation it's going to be the most challenging to educate, house, and keep them. if you look at how much to correct instead of all the problems, just picking apart the problem, you start to appreciate that there's a lot that is going right. and so this is true with both cultures and countries. >> guest: certainly i would agree with the caller it's important, i think, for folks to learn more about china. it's a country of 1.3 billion people. it's going to be complex. there is no question that people in china support the government. it's interesting to note, for example, that the guy here

before me was talking about over 100,000 mass incidents a year. there are a lot of chinese who are unhappy what is going on. we see growing split between the rich and poor, and inland and coast, urban and rural. these are problem that the chinese leadership needs to address. at this point in time. it's not at all clear that the rest of the chinese leadership are going to address them. going relieve the pressures we see. unfortunately. >> host: the anniversary of the square this week. >> guest: exactly. once again we saw an absolutely number of search terms that were banned from the chinese internet. even the words today on june 4th were actually basically being edited out. that's rather striking when you think about it that it reflects

a leadership that is insecure about how it is perceived by it own people. >> host: mike joining us from california. democrat's line. hi. >> caller: hi. good morning. my question is this. if you responded earlier what influence do you think chinese has on north korea to have the them behavior themselves. if north korea did attack south korea, what do you think china's response would be? >> guest: two very good and important questions. with regards to how much influence china has. they have a giant sludge hammer which is yeefl if you're going crack knuckles. it'sless useful if you try to do grain surgery. china is worried about the possibility of north korea collapse which probably -- last thing they want to cancel blarng blank that being said north korea depends on china for fuel,

for food, for a lot of other thicks. so china is -- we think. walk a fine line between influencing north korea and bringing down the government. that also being said china does view north korea as a friend. it has little interest. if north korea woke up tomorrow morning and decided to invade. i think they would be horrified. south korea is a better source of technology and frankly it's an easier country to deal with. so probably china might sit it out. if on the other hand for whatever reason north korea being perceived by being attack.

hi. >> caller: thank you for taking my call. one thing i often thought especially when the balance we had with japan, and now with trade and balance with china regardless of this bond buying. is it possible that the american government is allowing trade imbalance as a type of foreign aid rather than a cash payout for a foreign aid they allow this imbalance. thank you. >> guest: i think the idea

that the u.s. government allows an imbalance denies the reality that it's american consumers not the government who chooses to buy whether t-shirt, washing machine, big screen tv, or computers made in china. so unless government is able to somehow influence what it is that the average american buys at walmart, target, and pottery barn. i think the fault here, if there is a fault, lies in our own decision making as individual consumers. not that of the u.s. government. >> host: does china consider freedom of the press? from dan fry. >> guest: i think, china is very leery and weary of free press. the chinese press is state statewide. it's an arm of the chinese government, "people daily" all the newspaper are run by the government. there are some interesting sort of experiment on the edge things

like dailies that are semiprivate, they have stocks and corporate ownership. they get directive from the ministry of prop propaganda, they changed the translation. you will cover the story. you will not cover that story. for the foreign press, they issue very few -- they keep the people under tight control. stories about the attempt to escape china were cracked down the foreign correspondent was basically ugly video of some of them being beaten up by chinese police and plains clothes men. >> host: do they have television and internet extension when it comeses to news? >> guest: the internet in particular is very interesting. facebook, twitter, all of those are banned in china. there are chinese versions of them that are run by chinese

companies. as a result the chinese government through those companies can pull the plug at any time. many of the mass and rites are not covered in social media for precisely that reason. there are nine chinese central television channels, some of them are quite interesting. one is dedicated to agricultural news, for example. but, again, all is run by the state. there are no private tv stations. >> host: this is will from franklin, tennessee. on the independent line. go ahead, please. >> caller: thank you. thank you both of you. earlier you were talking about the trade between china and united states. it's pretty obvious that china relies a lot on the economy in the united states and considering how fast the economy

is growing in china, does the -- does the united or any other country have any national security concerns concerning their -- if their economy were to collapse? >> host: thank you, caller. >> guest: yes. it's often been said that the only thing more worrisome than a china that succeeds is a china that fails. china is a country of 1.3 billion. if their economy collapsed or shrank significantly. we would be seeing several things. population -- a lot of internal onrest. who was controlling them. it would be the question. there is also the larger issue of if you did that you wouldn't be disrupting the global supply chain. if you consider the microchip that run everything from car,

computer, spacecraft are made in china. if you disrupt the factory it's going have ripple effect. after the japan earthquake you had trouble getting spare parts for cars. it is a small look at what would happen. >> host: richard from rise. independent line. >> yes. i want to make a comment that i think it's absolutely ridiculous that if an american-based company moves to china, they should be considered a chinese company. [laughter] having an office here in rise. it's ridiculous that the way that china is charging us a 25% import tariff tax. we basically charge them a 2.5% import tax. so this no way we compete with

that. and the prices waiver. there's no way we can compete. these problems are not the problems that you have mentioned. it's the choice of the people that have receipted these problems that we're having. it's corporate america. corporate america is able to give as much money as they want to people's campaign contribution funds, and that is a result corporate america dictating whatever they want, they seem to get. >> host: thank you, caller. >> guest: well, i guess one of the things that differentiates us from the chinese is the broad spectrum of opinion that manages to make the way out. whether or not a company that has facilities abroad should be considered a foreign company is one of the sorts of things that really is to be addressed by our congress.

an our president too. i think that it does -- that sort of concern belies the reality of a more globalist economy. and i guess well leave it at that. could you expand on that when it comes to today's summit. >> guest: let me be blunt. i don't expect much to come out of the summit for two reasons. there are limit to what the leaders can achieve if you want improve mood and take the measure of your counter part. these are great opportunity. in term of actually substantially changing our influencing the relationship it's very hard. it requires an awful lot of detailed work that frankly neither president is qualified to do not because they're not smart people because they are presidents of major countries.

they have a lot of on their agenda. president obama, in particular, his secretary of state and defense haven't filled in all the position that is necessary to do the hard staff work. and so we have six hours or so of meetings you can air a bunch of concern. if you think the chinese are going end cyber intrusion or solve the north korea problem or end our commitment to taiwan because of six hours of talks. that's optimistic. >> host: what does that mean going forward for senator kerry and defense secretary hagel? >> guest: i think they need to get their appointments on the table and congress needs to approve the intord nant so we have a working group level meet that are essential. so strategic dialogue have substantiative agreements

initiative to move the ball forward. again, if you think that the tone will be set between in the summit, that's all well and good. butlet not mistake at fearic. asia sports that or -- supports that or -- who will be the various assistant undersecretary of defense with the east asia portfolio? who is going to be working for secretary hagel with regards to cyber? again. the same applies to secretary of state kerry. the slots haven't been filled. these are the people who are actually working on day-to-day basis up to their elbow on cyber and basic issues and alliance relationship issues. there are lot of equities that needs to be balanced out. it's not like state or dod or treasury can say this is america's policy. they have to agree with each other. it's important if we are going

to negotiate with china. we need walk in off a single sheet of music. diswhrois one more call mary ann from wisconsin. we are running a little short on time. go ahead. >> caller: good morning. whret talk about what the so called trade and balance would do as far as that goes. when people in the country can no longer go to walmart and buy a t-shirt for $4. they have to pay $29 for the same one. we're not going to be talking about trade and balance anymore. we're going to be talking about a civil war. >> guest: well, the caller identified a key point, which is that average american's standards of living has improved because of the level of trade with china. we need mechanize that. -- recognize that. it affects the vainlt of money -- availability of money. it influences u.s. china

relations. security is a partially an outgrowth. .. >> when you put on a uniform authorize a maintenance job. if you're a building or sanitation worker, you're subsumed by the rol