. >> rose: we begin this hour with interesting treatments on cancer, gina kolata wrote a fascinating three part series, dr. lewis wartman not only a cancer researcher but living with cancer, and dr. john dipersio, his physician. >> right now for most cancers once it spreads there is not much you can do it. and hope is if people can really understand the genetics and specifically target what is wrong with the cancer instead of hitting it with chemotherapy or radiation, going after what is driving that particular cancer to grow, then maybe they can actually stop it, or even kill it. and change the whole nature of the disease. that is the dream. >> that still doesn't seem like it is really me that has the

disease, in a lot of ways it seems -- it seems too coincidental, too ironic that it would actually happen to me, wilalmost see myself as detachen one way from being a patient versus being a leukemia doctor. >> it has been an interesting interaction between the two of us. i am his physician but i am also his boss. i am his colleague. i was involved in his recruitment as a fellow and then as a faculty member. i work closely with his mentors, who are really invested in him and completely committed to his success. so it is almost -- it is almost an objection more reason in, oxymoron in medicine but it is almost like a family affair .. the. >> we conclude with "the new york times" hong kong bureau

chief, keith bradsher. >> one of the lucky things about being in hong kong, i don't go to beijing very often and all over the rest of the china, and the further from beijing the more you run into that nationallyism, nationalism and the zero more you run into people that say china should be more assertive in pursuing its foreign policy. >> rose: the future of cancer treatment and the future of china when we continue. >> funding for charlie rose was provided by the following. >>

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: we want to talk this evening about cancer. there is new research signaling a major shift in the treatment and diagnosis of the disease breakthroughs in dna science are at the heart of this change, the

emerging ability of scientists to analyze genetic material may deliver on the promise of personalized medicine. gene sequencing allows them to reach patients faster medicines suited to their condition. significant challenges remain, the approach is experimental, difficult and expensive, joining me now two scientists at the forefront of cancer research, dr. lukas wartman is an oncologist specializing in leukemia washington university school of medicine, in 2002 he was diagnosed with the very cancer he dedicated his career to studying. last fall he sure strived disease for the third time. dr. john dipersio is his physician. he has a medical school's the division of oncology and also the deputy director of the university's affiliate of the cancer center at barnes and jewish hospital. >> and gina cola a of "the new york times". >> she reported as part of a ground breaking story on cancer research. i am pleased to have all of them at this table this evening.

welcome. it is good to see you. tell me about the series and what went into it and what you were saying and what is the conclusions that are exciting for us to look at. >> my editors have this idea of calling it the genetic gamble which i thought was a fabulous way of describing it. because as you just said, this is really, researchers tell me this is the beginning, the forefront of a new era, they hope, in understanding diseases like cancer, and cancer is sort of the first one they are starting to study in this way. what they are trying to say, this is -- cancer is really a genetic disease, it is not necessarily like a disease of the breast of colon or brain. it is really a disease of genes that have gone awry and if you can understand what is happening with those genes, are they too active or understood active or missing, and are there some that are just driving the cancer? it doesn't matter where the cancer starts can they figure out what is wrong with it genetically, then there might be ways of

stopping the cancer by actually targeting those genes. now, at this point, as you said, it is very expensive, and not available to almost anybody to get this kind of a genetic analysis. people say where do i go? there is not like a company that is going to go out there and do it for you. it is a lot of research tool type stuff now. but for some -- for very few people, who are sort of the pioneers of this new era, like dr. wartman, sometimes you can learn things that are really unexpected, they may find treatments nobody would have thought of and they may or may not work. sometimes they work for a short time and then they stop working. or they may -- but -- but the hope is eventually maybe they will find treatments that will work for longer time and maybe combining like they do with hiv, hitting the cancer in several weak spots at once so it can't come back. that's the dream, that's the hope, and at this point we are really -- it is really the very, very beginning of what people think is going to be a total

change in the way people view cancer and other seizes. >> and to the possibility of treating it. >> and changing the whole nature of the disease. i mean right now for most cancers, once it spreads, there is not much that can really be done. you can't stop it once it spreads from where it started and the hope is if people can really understand the genetics, and specifically target what is wrong with the cancer, instead of hitting it with chemotherapy or radiation, going after what is driving that particular cancer to grow, then maybe they can actually stop it, or even kill it. and change the whole nature of the disease. that is the dream. >> let me begin with you. you -- coming out of medical school what did you want to do? >> i was already interested in oncology even coming in to medical school as an undergraduate. >> rose: and all the way through your internship and residence city? >> that's right. >> rose: did you want to do research or always -- >> it is still a push and pull for me. i love seeing patients so it always has been hard for me to

say i want to dedicate myself exclusively to doing research. i have always been interested in doing research. but i kind of wanted a balance between seeing patients and doing research. >> rose: why leukemia? why the study of leukemia? >> it is hard to say. when i was a fourth year medical student i did a rotation at the hospital in st. louis and the preceptor, my mentor was fascinated by hematology, and so every day -- >> rose: that being the study of blood. >> the stud, study of blood so we would hook at blood smears under the microscope and really i think that caught the bug then, as far as wanting to study blood diseases. >> rose: tell me what leukemia is. >> leukemia is just another word for really cancer of the blood, particularly of the white blood cells. >> rose: and what happens when you have leukemia? >> these cells an pe aberrantlyw out of control and take over the

normal bone marrow space where your normal blood and immune system is born. >> what causes it to bro? so. >> so that is the question is really what we have been investigating for a long time, is trying to understand what makes these cancer cells grow, the leukemia cells grow, and the answer, the short answer is that there are genetic changes, knew petitions that occur in these cells that lead to their growth. >> rose: and what is it we think causes those mutations to take place? >> so there are a few known factors, there are a couple inherited syndromes, exposure to radiation, you know, these are very -- the minority -- >> rose: and environmental -- >> no, those all come there the minority of cases. >> rose: so environmental is a minority and whether you smoke or whether you -- >> that's right. >> rose: have an obesity or whatever that might be that may be contributed? >> the majority are probably just caused by kind of bad luck. >> rose: okay. is it meaning that you are born

with a gene that is likely to mutate? >> no. meaning that every time our cells replicate that the machinery that is responsible for replicating the dna isn't perfect, and so there are mistakes that are made, we are exposed to radiation all of us, small amounts and so that just sometimes it hits the wrong gene. >> so what did you think when you had devoted your life and you heard this question a thousand times you devoted your life to the study of leukemia and then you are diagnosed with leukemia. >> yes. i mean, it still doesn't steam hike it is, seem like it is really me that has the disease .. in a lot of ways. it seems too coincidental too ironic it would actually happen to me, almost see myself as detached in one way from being a

patient versus being a leukemia doctor. >> and what has been -- give us the sense of your medical history since you were diagnosed. >> so i was first diagnosed my last year of medical school when i was fishing up medical school. underwent a two years of chemotherapy, standard treatment for the disease. that went as well as could be expected. there were complications along the road but i did fairly well, was able to do blood research that last year of chemotherapy, then was able to roll right back into residency and completed my residency program and joined the oncology fellowship. fortunately, at the end of the first year of my clinical fellowship in oncology, relapsed, at that time, was treated with standard, very aggressive chemotherapy, went into a prompt remission and had a bone marrow transplant from my younger brother and which, again, was a tough process.

i had very aggressive conditioning prior to the bone marrow transplant, but as far as complications go, they were minimal and so i did well, and i was able to get back to work, this time, dedicating myself really to focus on research and genomics of leukemia was my focus and a couple of years later, here we are again last summer, started feeling run down and relapsed once again. this time was different. ii was again treated with very strong chemotherapy, but unfortunately did not enter a remission and so at that point, the situation looked rather bleak. my options were limited. we are looking towards getting

some experimental therapies. those options didn't pan out, and luckily for me, i was working in this top tier genomics laboratory, so my mentor there knew that i was kind of in bad shape .. after relapsing for the second time, and so -- >> rose: mentally and physically? >> yes. and he asked me if i would be willing to go on this research protocol and have my genome sequenced, and at that time, i was undergoing chemotherapy and the idea would be that milieu keep i can't would be in remission and this may offer, may or may not offer any real tangible benefit to me. but i was very keen on the idea of really trying to understand what drove milieu keep i can't, the hope that it would help

other people to my disease is the most common childhood cancer, but. >> rose: predominantly in children. >> that's right, but there is not much known about the adult variant which is very lethal. >> when they are diagnosed, they are a year or two? >> so the cure rates for adults are around 30, 40 percent. >> rose: yes. >> if the disease is controlled, isn't controlled most patients die within weeks. >> rose: weeks? >> yes. >> rose: so you came in at what stage? >> i was there from the very beginning, yes. and -- >> rose: tell us what has happened from a standpoint that gives us some hope when we are sitting next to the patient who was also a researcher. >> well, i think that it is just an unusual situation to take care of one of your colleagues, number one, and number 2 a colleague that works in an overlapping area that is interested in the same things you are. sort of a challenge and unusual

situation where you are taking care of someone and knows as much about the disease as you do, sometimes more, because he is incented to read everything in the world. so i am often fending questions about things that i am not yet aware of, because he is really up on everything. but in reality i think it is a good thing for both of us. it has been an interesting interaction between the two of us. i am his physician but i am also his boss. i am his colleague. i was involved in his recruitment as a fellow and then as a faculty member. i work closely with his mentors who are really invested in him and completely committed to his success. so it is almost -- it is almost an oxymoron in academic medicine but it is almost like a family affair. it is a person of your family

that you are taking care of and we obviously want to do everything we can to pull him flu, but we have enormous amounts of momentum institutionally to make sure everything gets done correctly .. so in spite of him knowing a lot about his disease we are able to sometimes even stay healed of his curve sometimes and provide him with good therapy. >> rose: so what has happened here that puts them on the frontier of science? >> what happened was when they decided to take a look at the genes in his cancer and compare them to his normal, healthy cells. they found something that they really did not expect. they found a normal gene in his cancer that was totally in over drive, it was producing, way, way too much of its product. and that seemed to be something that was driving his cancer to grow, and by coincidence, there was a drug, never tested, never given to anybody, to his knowledge, with this cancer but it was used for advanced kidney cancer. >> rose: right. >> and that drug, by coincidence, should, if things went right, shut down that gene that was too active.

so what they decided to do was to try that drug and see if they could get lukas into remission, because if they couldn't, he would have been dead last fall. and if they could get him into remission then he could get another bone marrow transplant and maybe be somebody who actually survived against, really, all odds. the problem but that the drug caused $333 a day. it was off label so his insurance company would not pay for it, even though he appealed, they said no way, lukas decided he really wanted it and he scraped up enough money to take it for one week and all of a sudden his cancer started going into remission. the doctors in his division, pulled together and pulled their money and bought him a month's supply, meanwhile, a nurse-practitioner wrote a pleading letter to pfizer which did come through and decided they would give him the drug. now the question, though, is, is he going to take it the rest of his life or what? i mean when do you stop? it is holding his

cancer down he doesn't seem to have any cancer anymore is he supposed to keep taking it in case there are some cells there or not? luckily guys search giving it to him but can you imagine how much this drug colorados over your lifetime? and no one has ever taken the drug before with this cancer, never. he is the first. >> it is great, isn't it? >> it is amazing, it is amazing, and it is amazing his cancer went away. i mean, at first luka said he didn't believe it you have test after test, more and more sophisticated. >> rose: were there physical manifestations? >> it was hard to say at that time because i was really kind of beat up with having just finished a course of really aggressive chemotherapy and kind of beat up in the sense that knowing that the leukemia wasn't in rescission and my odds weren't very good, so i didn't immediately perked up but my blood counts definitely did. >> rose: got better. >> yes disp why is this exciting for you? other than the fact a

life is at stake and that is pretty damned exciting right there. >> i think there would have been no way we could have had any insight at all into what is going on unless we did what we did. and that is take a bold step to sequence the entire have known. so, genome, it is sort of a crazy thing to do .. a few years ago it was almost a nutty thing to consider sequencing the entire genome, since it took the nih and invent tors group, you know, almost 15 years to do the first one. >> rose: and supercomputers and everything else. >> and they had supercomputers so to think you could actually sequence a cancer's genome in real-time and then compare it to the germ line unit that was the dna you were born with. when it was first done, the number of sequence changes when we just looked at the tumor without the germ line d dna that cells are born with there were over a million changes so we thought, that was it, we were done. but then when we started

comparing it to the dna you were born with, and a lot of these changes turned out to be just common variations of the genetic code and the vast, vast majority of these disappeared and then with additional sequencing efforts, all of them disappeared from hit rally several million sequence variations came down to ten or 12 changes. and the most amazing thing is that is a very manageable number of changes, so in the first patient's sequence, the patient had aking acute leukemia, but the principles are the same, that is you can distill all of the genetic events that contribute to the malignancy by doing this sequencing effort. the next big challenge will be to figure out which one of those changes are driving the disease. which one of those changes are really making it come back or relambs or spread? and which changes are just background

noise? we have some preliminary information that a lot of the changes are background noise, so that -- also, i think i view this .. optimistically that means the true drivers of these diseases are a limit number of changes and with a limited number of changes you have -- and describe a change to me. >> well, you know, dna is the building block of life and so you have four nuke cleo tied that make up the genetic code so only four nucleotides. >> and there are about 3 billion in the human genome. so changing one of those in -- within a gene can actually result in a mutation. >> rose: suppose this has an optimistic end result. what does it mean? >> what it could mean and this is -- >> rose: could. >> -- could as cancers are

better understood, people will see there are some common driver mutations, some mutations that people with lukas's kind of leukemia tend to have, and now you can generalize it to every cancer in its own unique way. now somebody comes in and they have the same kind of cancer that lukas had. the first thing someone would do, it is not the to sequence the entire genome like they did with lukas. that is expensive, it took them a month even working really hard, and with incredibly fast -- but you can't do that constantly, even so, you can't feasibly do that for everybody but what you say here is a gene that tend to be the driver mutation, the one that goes wrong, we are going to look and see if that is wrong in you, and if it is, we know there is this drug that was for kidney cancer and it is going to shut your gene down and you are going to be okay, and so that what people are starting to do now is, there is a big national institute of health project called the cancer

genome atlas and taking 20 different cancers, hundreds of samples of tumors from people all over the place and saying we are going to go through those cancers and we are going to find out what are the important mutations so when people come in we will have some ideas about what drugs to test on them, how -- how to do this, so you won't have to say well throw some chemotherapy at you. >> rose: so it is really refining. >> it is refining so you know what to look for in a cancer now instead of just saying with lukas let's go for the whole genome and see what we can find. >> how do we describe these genes? >> so a gene is the genetic component that encodes the protein. >> rose: right. >> to be quite honest and it is often assembled in a complicate way so there are pieces that are assembled along the dna of a human or any other species, and there are pieces between these protein coding regions that are just filler, and amazing complexity of the human genome

as opposed to some other species is it has a lot of this filler stuff and the filler stuff gives the genetic machinery a fine-tuning control over which genes are expressed and how much they are expressed, and so i think that it is going to be a lot more complicated than just looking at mutations. it is going to be a lot more complicated, because i think that there are some of these jeans that are mutated and there are some of these genes that are actually modified. they are modified, the dna is modified or the proteins that assemble in the dna are modified, technically, we should be able to determine some general pathways of what went wrong by identifying all of the mutations but it is going to be more complicated than that, i think. >> rose: are you optimistic? >> i am optimistic, definitely. i mean, just the amount of progress that we have made in the past few years is remarkable, this technology,

wouldn't have been available the first time i relapsed, and. >> rose: but not available? >> huh-uh. we published the first cancer genome -- in 2008. that is the year i relambsed. and that was a huge effort and it cost over a million dollars to do. so just wouldn't have been feasible to sequence my genome at that time. >> rose: everybody says we are getting closer and closer at some point in the near future you can sequence your own genome for less than $5,000. now is that -- >> that's a little bit different than what they are talking about. >> rose: tell me why. >> first of all, if -- you are not trying to get the degree of accuracy they are getting. you have to do these things multiple times because you want really accurate and then you have to do the cancer genome and normal cell genomes and then the analysis comparing them that is a very time consuming and expensive part. it is like a whole new -- it is

a different realm than getting your own genome sequenced and i think it has been a little bit misleading to say genome sequencing is so cheap you can go out and get your cancer genome sequenced, what is involved is huge, it takes a lot -- they used a supercomputer to do the analysis. >> rose: right. >> it took a month to do the analysis. it is not -- it is not -- at this point, it is not just well we will just get the sequence of somebody's genome. >> rose: but is there something about leukemia that made it easier than other cancers. >> it is easy to get at the disease you just get it out of the blood or bone marrow mthat sense it is easy, accessing the tissues is easy, getting the germ line of the dna you are born with is easy because we just do a skin biopsy, very simple, also it turns out even though acute leukemia are dreaded diseases with expected half-lives very modest and not as good as we like, bad diseases, they still are associated with a very limited number of mutations, which is

surprising. paired to something like lung cancer or head and neck cancer or skin cancers, which are associated with lots of mutations, incredibly complicated genetics of those diseases, so in a way it is a perfect model system to study, and also, the results, the disease is a rapidly growing tumor, as opposed to some solid tumors which stick around forever, and then obviously they grow, but they grow at very imperceptible rates, they just don't go away. where leukemia is either away oregon. >> rose: and you cannot over emphasize the fact you found a drug that can treat it? >> well, could treat the one that lukas has. >> rose: ah the one he has. >> see because this is very personalized. it is not clear yet and i think you told me you are going to start looking at other people but it is not cheer how often people have exactly this thing, this genetic problem with -- that is driving their cancer. that has to be investigated. that is part of this too, you

know, you can't take -- what you don't want is each person to be an experiment unto yourself because then you can't really help many people what you want to do have s what are some general principal also and the drug that helped lukas would that help other people? that is the next step. >> rose: go ahead sovereignty one of the general principles is, you know, how do you know which one of these mutations are important? so one caveat is if you -- you look at mutations recurrent in other patients, that makes sense. so mutations that occur frequently over and over in the disease is a smoking gun. probably manager is going on there. you may not have a treatment, you may not have an obvious way to intervene, but that jean is probably involved in the progression or initiation of the disease. in lukas's situation, as i said it was more complicated than just finding a mutation, we looked at his tumor and my colleagues in the genome institute, mar advertise and rick wilson and lukas's mentor, tim.

>> female speaker: whdrove thisn we looked at the data we were very disappointed we found a lot of mutations but none were smoking guns, none were smoking guns so we had gone through all of this effort enormous amount of personal manpower, time, effort, supercomputing time, et cetera and we came up with a bunch of noise that we really couldn't imagine targeting with any therapy. and then we took another step above and beyond just looking at the mutations and looked at the relative levels of gene -- all of the normal genes that are expressed and we found one gene that was not mutated and complete my normal, it was way over expressed or expressed at a very high level and this gene turned out to be an enzyme, and this enzyme is known to actually in another disease to drive the disease forward. so we said if a equals b and b equals c, a equals c we may be able to apply drugs that work in this other disease towards lukas's disease and that is how it happened. >> rose: so characterize where

we are in this moment. >> so, well, i can tell you that when we treated him, the most of us didn't believe that things were going in the right direction, you know, he was having a little bit of trouble with this new medication, tolerating it, and that has been one of the problems with him continuing it long-term, it just has been hard for him to tolerate it and he has other problems with the transplant to deal with, but at that moment, it was just -- >> rose: stem cell? >> yes, before the stem cell when we got him into remission it was really one of these moments that everybody says -- we waited for every test to come back, the first test that came back wa was the bone marrow and previously we had done this before and his bone marrow was negative and i told him actually, that he was in remission previously and then i had to eat my words and say, look, i'm sorry, but you still have active disease, the more sensitive test show you still have active disease so we are all very disheartened. this time, it wasn't even -- it wasn't even close, there was no evidence this was going into

remission so i told him that it wasn't going in remission and put him on this drug, we were all very careful to say he was in remission so the marrow -- well, okay, lukas, and i had a thing that i would be the one that would tell him and he would always look himself which is again hipaa privileged so he knew he had remission in the bone marrow and the rest of the studies came back, that he was in remission and then he stayed in remission until we could identify an unrelated donor and do an unrelated donor transplant. and so first of all, to get him into remission, now this is his third relapse and to keep him in remission is really remarkable. >> rose: it is a remarkable series and a remarkable study and it makes all of us, who have known in any way cancer excited about, you know, with great caution excited about the future, yes? >> that is how i feel. >> rose: and you.

>> definitely. >> rose: thank you, sir. keith brader? is here, he is the hong kong bureau chief of "the new york times". as china reports its worse growth figures in three years many are wondering what a slowdown could mean for global recovery, this news comes at a sensitive time in chinese politics, in a year when beijing prepares for its once in a decade leadership transition, keith bradsher has been watching these developments from ring decide seats, i am pleased to have him back on this ram. >> thank you for having me on your show. thank you. >> rose: this is a good beat, i would think. >> it is a terrific beat. i absolutely love it, it is the most fun you can have in journalism, i think, watching the chinese economy. >> rose: is it better from hong kong because the business is so business centric? >> it is a very good place to find people who really know what is going on in china. >> rose: and in the rest of asia as well? >> and the rest of asia, exactly an i don't do just china although primarily china these days but also travel in

southeast asia and the rest of the region but hong kong is a place where you get people from all over the asia and they speak more candidly more often in hong kong, even people from beijing sometimes speak more candidly and in hong kong, so it is a great place to know what is going on. >> rose: what do you think is happening to the chinese economy and the chinese growth which has been so spectacular? >> i think right now, china is having both a cyclical slowdown and a longer term secular slowdown, and the dilemma for china is that the things they can do to offset the slower growth we are seeing this spring could have the effect of maybe bringing down some what their long-term growth rate. so as the chinese economy is seeming to slow i have been picking up the pace of my own travel, seven trips within china in the last two month, and all over china, and in city after city, you see -- you see the slowdown, for example, go to a high floor in a building at

night in a hotel or wherever, change high, look out, it used to be you would see koabs of lights from all of the construction sights that would go 24 hours a day, they have gone down to one shift. they are no longer three shifts through seven days and even during that shift they are not working often a full eight-hour shift. so you have had very large cutbacks in construction. just a month ago, i was in coal mining country in north central china, and this was a place i had been several times before, this was the first time i had seen empty lots full of coal, road sides lined with coal. why? because the demand has weakened. the coal holding port areas at the major ports are over flowing with coal to the point they can't unload all of the ships arriving with coal. and people are waiting in the coal mining areas to sell at better prices to you are getting -- without cutting back on production. some of this the government knew was coming in.

>> some of this they knew was coming. >> rose: they understood that housing was at ri? >> they did, and it is partly deliberate. that is, he has made very clear he is concerned about housing affordability, and so the government imposed the essentially ban on the purchase of second and third homes. >> rose: right. >> what has surprised everybody has been the extent to which the chinese government has stuck to that policy even as the broader economy has slowed down, they seemed determine to improve the affordability of housing even at a time when they face weakening external demand, even at a time when local government investment is slowing down some what. you tend every ten years to get a slowdown in government investment spending as they are waiting to see what the new crew really wants, what kind of projects are really going to be blessed? and so you have. >> rose: with the new premiere. >> exactly, a new premiere and a

new president. >> rose: in the politburo. >> so it is the intersection of several different slowdowns for the economy that is causing what now seems to be a rather pronounced cyclical slowdown. >> rose: and how much of it is driven by the lessening of demand from europe and the united states? >> part of it, but not a lot. there it gets very hard to judge, but because first of all, the lessening of demand from europe but not from the united states, in fact, in pea, he exports to the united states were up 21 percent. in june ex-poarts year over year, up another 12 or 15 percent. so one of the concerns, in fact, is while europe is now flat, and in fact even down slightly in the case of germany and france, greece, italy, one of the concerns is that a lot of chinese exporter, a lot of chinese companies period are looking at the u.s. market as the most attractive place to try

to extend good. >> it is easier for chinese exporters to find the worker as they needle as the labor short damages have eased because of the slowing of domestic demand so the big factor here is the slowing of, a little bit of domestic consumption, retail sales are not growing as quickly, slow down in fixed investment and a smallish part is the slowdown in the european demand. >> rose: every chinese leader i have interviewed and every chinese expert who knows something about china and the way china thinks says that china wanted economic prosperity in order to continue to develop the country so they could deal with the kind of tensions that are naturally there within the society. >> how does that change that dynamic, the fact that the economic growth rate is dechining programs below eight percent? >> what is really interesting about the current slowdown is that it is coinciding with the period of greater civil unrest in different parts of the

country. you didn't see this in early 2009, in early 2009, i was going into factory towns and there were -- and people just left. just crowds of people were gone. this time, you don't see quite that level of flight from the factory towns back to industrial languages, but what you are seeing around the country is a much greater willingness to confront the authorities on, for example, environmental projects that are environmentally sensitive. you are definitely seeing more protests than you have seen in years, the power of pro. >> rose: the power of protests have an impact in beijing? >> it does. mostly, though, the protests are middle-aged people who don't feel they have a lot to lose and in a society of only children people tend to be very careful of anything that would hurt -- >> rose: are they changing the one child policy. >> they talking a lot about it they are thinking of easing it at the margins if both parents are only children, then they may have a second child, already in

rural areas -- well actually in rural areas ever it never has been tightly enforced there has been a push by a number of family planning experts to change the policy more quickly because they face such a severe demographic crunch. >> rose: what is the ratio of men to women, young men to women? >> i haven't seen the latest -- >> rose: i mean the point is that some people rayed the question that is a real problem about the society. >> it is a real problem for the society. and. >> rose: because of the favoritism for young sons rather than daughters. >> as the problem for society and you end up, a son who is unable to find a wife is a bare branch in the family tree and the problem is what do you do one of the things you are seeing is that young women and their parents have more leverage than they used to, and so you get a lot of households in which the young women are demanding that a young man has some kind of an apartment before he becomes marriageable, and yet it is so hard to afford an apartment.

i was talking to a young man at length, in fact, somebody who did not want to work in a factory, but he was -- he had a girlfriend and saying you need an apartment. and he was saying to me, first of all, i don't want to take a factory job, second of all a white-collar job will pay less than a factory i don't know so he is putting pressure on me to get a well paying job but even if i get one, you take, it would take 20 years for him to afford a 400 square foot apartment that is at opening pay, now, until very recently you have had a steeper gradient of starting pay to -- versus when you are ten, 15 years of experience, in china than almost any other country you can have people starting at $5,000 a year, earning $60,000 a year, but even that curve, that grading is starting to come down as you have more educated people. >> rose: about politics there is a new president coming. >> yes. >> rose: and the existing vice president? >> yes. >> rose: is there anticipation

of change or is there a sense that the system simply changes the individual rather than the individual changing the system in. >> i think a lot of people are waiting to see, but it is very hard for a new leader to make a lot of quick changes for the simple reason that they do not have the ability to immediately make ripple changes all the way down the ladder, it takes years to maneuver your own people into position. if anything, a leader's power seems to wax over the course of their ten year tenure and the last year or so finally diminish, so in the first year, we are likely to see moves to consolidate power as opposed to a radical shift for -- towards or away from economic reform, we are not expecting radical, immediate changes and of course all of this unfolds in stages fir we have the party congress, we don't have a date for it and the new cab met, the new

premiere next march, and so it could easily be may before we start seeing, for example, whether or not there is going to be another real estate policy or whatever it might be. >> rose: is there any kind of basic division between one group versus the other in china? i mean we have always money that china has had a lot of power although he was the leader of. >> who has the opposing point of view? it comes from where? >> that -- the longer you watch chinese politics, the more complicated you realize it is, and it is not at that -- it does not split into easy factions. >> rose: it is not -- >> it really -- everybody wants to put, for example, an overlay of -- police lings versus nonprincelings communist youth league and the more you look at it you identify that is not a workable model. >> rose: what about russia, a

riddle wrapped inside an enigma. >> it really is, and then you have got personal cliques, it is harder to figure out that japanese politics in some way and japanese politics also has. >> rose: it defies understanding. >> yes, it also has the personal studies. >> rose: and the case we all know about had what implications? >> that has been interesting the way it has drawn back the curtain on the -- what sound like the an abuse of power that is possible by a provincial leader at the local level, it has been -- it has been interesting. some people portray it favorably that somebody who seems to have been a very ruthless operator is removed by the system before he actually reaches, for example, a standing committee, on you can argue he did reach the pollitt bureau before he had his come up panels. some people are comeuppance.

>> i can recall even a year ago being told by somebody, he will get his wings clipped. >> rose: is that because he was so out front in terms of sort of talking about mao and all of that? or was it -- i mean was it because he had an idea that was threatening to the establishment or simply because his style made him offensive to too many people? >> all of the above, but particularly his style was threatening, because he was moving past the internal system to appeal to the general public, and then also his willingness to go after corruption in ruthless terms, in terms of throwing people in jail for 500 and eight days for a lawyer who had been defending alleged organized crime figures, his willingness to go to resort to extra legal methods for his anti-corruption drive and practically every leading family in china is vulnerable or has members vulnerable to corruption issues.

>> rose: he is a princeling. >> and many have done well. >> rose: he has done well because -- >> >> rose: why has that been possible? simply because their parents had the power? their fathers had the power and their father's father's had the power. >> and they have the influence and the government maintains a very large role in a lot of decision making, and so people are constantly looking for ways to influence that, and one way to influence it is to. >> is to hire or retain one of the family members. >> rose: the wife is in jail, is she not? boshili. >> they are in retention. they both have been in detention, neither has yet been, has yet gone on trial or heard from, yes. >> rose: a and i mean he is actually charged with murder, is she not? >> she is actually being investigated on suspicion of murder but she has not actually been legally charged. they have said that they are -- that they have serious

suspicions that she -- >> rose: poisoned a british -- >> it has not been confirmed he was poisoned but yes was she involved in the death of -- >> rose:. >> yes, exactly. >> rose: you hear that in sort of the ether. >> well, there have been lurid accounts as to whether or not he was -- as to how haywood would be poise sonld. >> rose: a businessman. >> yes, a businessman. >> allegedly they were using him to transfer money out of the country. >> exactly. >> rose: there is it is notion of a name you would know and i won't, the security chief, the guy who was very high up in terms of national security. >> yes. >> rose: it was thought for a while he might fall, but he didn't. >> oh, no. i'm sorry, you are referring to joy un dong. there was a lot of speculation about him and there are public appearances that show he is not gone and they seem to have limited the initial investigation to bo and his

family. there does not seem to be an am etite for a wide-ranging purge of other senior officials. >> rose: so what will happen to hujintao. >> he will probably continue to wield a lot of influence. >> rose: i mean it was predetermined he would be the president of china by dong chow ping. >> exactly right. >> that's as far as he got. >> yes. exactly. so now ping is the first to really emerge on his own as the next generation. one of the questions, in fact, is whether or not we will see seven or nine people in the new standing committee. keeping it at seven maybe makes it more easier to maneuver, easier, to make decisions one of the thing to remember is increasingly the president of or the general secretary in the context of the standing committee is first among equals so this is increelsingly a country run by committees and not individuals. >> rose: the policy may have been more helpful on syria, they are following russia's lead to a degree. on iran, while they have taken

some stems forward, they would like them to do more, the u.s. and some people on the security council. what is their foreign policy? >> i guess i would have a couple of answers to that. one is that they retain an official policy of favoring nonintervention, the country should be allowed in their view to do anything they darn want to do within their border and why they think syria, they don't like when other countries tell them what to do. >> it is a storn i are sovereignty thing. >> they don't like people talking about the human rights policy and so they don't like people going in and bothering syria although there is a popular revolt. >> exactly. what is one of the most interesting things going on now is the rise of nationalism in the chinese public. and that is beginning to constrain their room to

maneuver. when you see, for example, in the south china sea the repeated chinese statements that south china sea essentially is theirs practically down to the beaches of indonesia. >> rose: that is the issue? that is a conflict? >> that is worrisome. one of the lucky things amount being in hong kong is i don't go to beijing very often, i go all over the rest of china. and i think the further you are from becaming the more you run into that nationalism, and the more you run into people who say that the china should be more assertive in pursuing its foreign policy, one the, one of the questions for example, if china becomes a more democratic country would it be more or less assertive in you do have at times a jingoistic, increasing jingoistic media in china, one side of the spectrum .. a more dovish peck trust me is to be censored so you have a fairly often nationalistic media and that is increasing people's

perception in china that china has claims to area that it didn't even really strongly voice a claim to. >> rose: is there anything about the culture that you have seen that suggests china will not be able to be as competitive with the united states as you might assume? >> i had have this discussion a lot with my colleagues and there is a spectrum of views on it. i lean towards the end of the spectrum that china will be extremely competitive for years to come. the -- china could remain very competitive, even while having problems, with its domestic my. the reason, i mean you still have a country with $5,000 per capita gdp, there is so much more they can do by copying before they ever. >> rose: and the united states just 40 or 45. >> exactly or compared with japan. one of the things people forget when they start drawing comparisons between japan and china, is japanese growth really slowed down when auto industry

wages, i used to follow that when i was detroit bureau chief. >> it hit u.s. levels by the late eighties and japanese growth really slowed down, in the case of china, we are still talking roughly a quarter of u.s. wages. >> rose: it happened because the price of cars went up and were no longer as competent mighe inthe world market or somr reason? >> several factors. because of high wage growth combined with currency appreciation. now in china you had 21 percent increase last year in year over year in migrant wages. blue collar workers are up in a hurry but a long way to go to reach u.s. levels. so in ten years, they will really need more innovation, but do they in the next two or three years, there are still gains to be had, and people are still trying to figure out in china how to make use of these extraordinarily good highways,

extraordinarily good inner city high peed rail, i ride fairly often between guilty or not guilty sao in china and that is a distance on the high speed rail, 300-kilometer an hour, very impressive, we are talking a distance from, say, new york to richmond, there is a train every four to ten minutes, and even on, say, an early tuesday afternoon, last time i did a couple of month ago the next couple of trains were sold out, that is 800 seats a train, 1,600 people, if you go on a late friday afternoon, you can sometimes have to wait eight or ten trains, 6,400 people to 8,000 people, you just go to the train station and get a ticket for the next train, so that is turning places like this into not a bedroom community but certainly part of the greater sprawl that you get down in hong kong, and it used to have real estate price as quarter of the

other city and now they are moving up. you see that all over the country. there are so many areas that are being brought into the broader economy that previously were almost cut off, the migrant workers don't have to come out of those areas because they can now, because they are now integrated in the economy as those areas are brought into produion i think you will -- the economy will continue to get a sort of further profit and gains and make them competitive with the united states even without innovation. >> rose: what has to happened to change their human rights policy. >> i think the human rights policy has been evolving in some way and at times it looks like three stems forward and two steps backward, but they -- the artist, and again i am an economics writer and not a human rights writer, but he -- he was not severely mistreated during his time in prison. he had people shadowing him, he

was not being for communicated and some of the other horrors we have heard about. actually some of the worst cases seem to be, for example, the blind lawyer, where you have -- who is now here in new york, extra judicial methods to keep control of people like that. but what is interesting is that they are tolerating, to some extent, protests. and to some extent also people feel like they can go ahead and protest. one of the interesting things, and one of the most important protests we have steam lately, is first of all the local authorities canceled a very large project that had been blessed by beijing because of local opposition, because of local protest also they gave in. but when they canceled it they put out on the web site of the police department and twitter messages they said okay we have canceled it, but absolutely, we will not tolerate another protest, we will deal with it harshly and ruthlessly if there is another protest and that night they had the largest

protest yet because people were demanding the release of people who had been detained in the previous two days and they released them. >> so that shows that