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Rising Tensions Between the World's Second- and Third-Largest Economies

Aired September 18, 2012 - 15:00:00   ET


CHRISTIANE AMANPOUR, CNN HOST: Good evening, everyone, and welcome to the program. I'm Christiane Amanpour. And tonight, our focus is on the rising tensions between the world's second- and third- largest economies.

Outrage in China aimed at Japan, forcing companies like Honda, Nissan and Panasonic to close down across the country as angry Chinese protesters destroy Japanese factories and stores.

The two countries are facing off over a group of small islands in the East China Sea. The Japanese recently purchased them, even though China lays claim to them. And this comes at a particularly raw time. September 18th marks the anniversary of the Japanese invasion back in 1931, called National Humiliation Day in China.

The old wounds are fresh, but this is a 21st century dispute. China is building up its navy, might making its presence known in those regional waters and on Monday, Japan announced an agreement with the United States to deploy an advance missile defense system. This all comes as China is preparing for a once-in-a-decade leadership change.

Xi Jinping, the man slated to take over as China's president, mysteriously disappeared for a few weeks, but he's now reappeared and he's scheduled to meet with America's Defense secretary, Leon Panetta, in Beijing on Wednesday.

And all of this tension is playing into the once-every-four-year leadership contest right here in the United States, where China has become a political football and this week President Barack Obama filed an unfair trade complaint against China with the World Trade Organization. And his challenger, Mitt Romney, has also been talking tough against China.

As chairman of China United States Exchange Foundation, Tung Chee Hwa aims to bring the two countries closer and he has a close relationship, of course, and a unique perspective on the highest levels of the Chinese leadership. He joins me here in the studio in a moment.

But first, a look at what's coming up later in the program.



AMANPOUR (voice-over): From notorious Russian party girl to outspoken critic of Russia's party politics --

KSENIA SOBCHAK, RUSSIAN OPPOSITION ACTIVIST AND SOCIALITE: We can't change what we were, but we can change what we are going to be.

AMANPOUR (voice-over): -- and after a week of angry protests, turning Muslim outrage into something unexpected.



AMANPOUR: We'll get to that in a bit.

But first, Tung Chee Hwa was the first chief executive of Hong Kong after the handover to China from the U.K. He's now vice chair of the Committee of the Chinese People's Political Consultative Conference and founding chairman of the China United States Exchange Foundation, which works to strengthen the relationship between the U.S. and China.

And a very good day to have you on with us, Mr. Tung. Thank you for being here.


AMANPOUR: Let's go straight to these -- what look like escalating tensions between China and Japan over those islands in the East China Sea. And I want to play you first what the U.S. Defense secretary has said about this situation.


LEON PANETTA, SECRETARY OF DEFENSE: It's in everybody's interest -- it is in everybody's interest -- for Japan and China to maintain good relations and to find a way to avoid further escalation.


AMANPOUR: Are you concerned about what's going on? Do you believe it could erupt into a full-blown war or a conflict between the two?

TUNG: Well, I agree with what the Secretary of Defense was saying, how important it is for China and Japan to maintain a good relationship. Unfortunately, what Japan did really inflamed public opinion in China.

AMANPOUR: Do you think it could lead to worse than demonstrations in the street and destroying Japanese businesses?

TUNG: I think the issue really is this, that in the `70s, there was a peace treaty between Japan and China. And in that treaty, there was one item which they could not agree. So they agreed to disagree, which is about these islands.

AMANPOUR: So they shelved it.

TUNG: They shelved the agreement. They shelved the argument, but agreed that there would be status quo and there would be a joint effort to search for natural resources. But since that time, Japan has moved away from the status quo. Every now and then they will encroach (ph) on the situation and the latest act, of course, inflamed the public opinion a lot.

AMANPOUR: What do you think the U.S. role should be in this regard? Do you think there is a role for the U.S.?

TUNG: I think it is very important for U.S. to make it clear that, you know, this is an issue for the two countries to resolve, and the two countries need to resolve it.

AMANPOUR: Can they?

TUNG: I think a nudge towards Japan by America would help a great deal. And it is important.

AMANPOUR: Do you think it will be resolved?

TUNG: I hope cooler heads will prevail.

AMANPOUR: OK. You don't sound very hopeful, Mr. Tung.

TUNG: Well, it is a difficult issue. And I think Japan, it is not the first time. It's a number of steps they have taken, the Japanese have taken, to encroach (ph) on the situation, and I think it's -- it needs to be looked at. The Japanese needs to come back to the table and say, OK.

AMANPOUR: What does the Chinese leadership say about this? Have you spoken to them about this?

TUNG: The Chinese leaderships are saying very clearly this has got to stop. Come back to the tables and see how we can work it through.

AMANPOUR: Talking about the United States and Secretary of Defense Panetta's visit to the region, this famous pivot of the U.S. to the Pacific, how do you see that? How does the Chinese leadership see it?

TUNG: Well, I would give you my perspective, that you said it's a pivot. The United States is coming back. My point is that the United States never left Asia, never left the Pacific. You have always been a Pacific power; you will continue to be a Pacific power.

And after the Second World War, well, we fought the Second World War together against the Japanese and after the Second World War, you provided a market and an umbrella to allow many of the Asian countries to recover from the ravages of the war. And that in the `70s, United States and China came together against the hegemony of the Soviet Union. So --

AMANPOUR: But the U.S. has always been --

TUNG: -- (inaudible) -- you were always there. You were always part of the Asia Pacific and from China's perspective, we welcome United States in Asia, playing a constructive role for the prosperity of Asia.

AMANPOUR: And does the majority of the Chinese leadership feel that way? Or are there different views?

TUNG: I think by and large people feel this way. But some of the (inaudible) activities and behaviors invite a degree of mistrust --

AMANPOUR: Such as?

TUNG: -- which needs to be really looked at.

AMANPOUR: One? Which activity?

TUNG: Issues -- you know, give example of this issue with Japan and the important thing for America to be really even-handed would highlight how, you know, improve this issue a great deal.

AMANPOUR: Let's get to the leadership change that's occurring right now.

Give me -- what is the truth of what happened to Mr. Xi, Xi Jinping, who was out of sight for a couple of weeks, has now reappeared, what was the reason for his disappearance?

TUNG: Well, pressing America was (inaudible) or the speculations that --

AMANPOUR: But what do you know?

TUNG: -- he hurt himself in sports.

AMANPOUR: What sport?

TUNG: He's now recovered. And he's now back at work. And in China, you know, the health of senior leaders is for -- is not a public issue, you know. And I suppose, as time goes on, as China becomes more and more open and is also part of the world, all these things will eventually change.

AMANPOUR: So you think some of that secrecy and opaqueness surrounding leadership will change?

TUNG: Well, on this particular health issue --

AMANPOUR: What precisely was wrong with him? What --

TUNG: His back problem --


TUNG: I believe it's swimming.

AMANPOUR: Huh. All of this hullabaloo and political intrigue just for that? Because they wouldn't say what it was.

TUNG: No, your speculation more than anyone else.

AMANPOUR: Well, nobody would say what it was.

Is there any doubt in your mind that Mr. Xi is going to be the next leader of China?

TUNG: I have no doubt whatsoever.

AMANPOUR: So he will be?

TUNG: Yes.

AMANPOUR: That's sorted? Do you know when the leadership contest will be, when it's called for?

TUNG: I believe it's some time in October.

AMANPOUR: In October?

TUNG: Yes.

AMANPOUR: Will the current president, Mr. Hu, will he retain leadership of the military?

TUNG: I'm not privy to this information based on past practice, he will retain (inaudible), the position for some times.

AMANPOUR: Let's talk about how China has become a bit of a football, as I said, in the U.S. presidential election. I want to play you just a couple of clips from what both President Obama and Mitt Romney have said.


FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: This is wrong. We're going to crack down on China when they manipulate their currency, when they steal our goods, when they don't protect our intellectual property. We're going to make sure that China understands we mean business, trade is going to work for us, not just for them.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You can't stand up to China when all you've done is sent them our jobs. You can talk a good game but I like to walk the walk, not just talk the talk.



AMANPOUR: After all that you've tried to do, bringing both countries together, do you -- how do you assess this?

TUNG: Well, let me tell you this, you know, in election, there will be a lot of political rhetoric and we understand this and we live with this for a long time already. We take it as political rhetoric.

But what I want to say to you is that in the 40 years since Mr. Nixon's visit, eight United States presidents from Nixon, Mr. Nixon to Mr. Obama, eight of them, and four generations of Chinese leaders work very, very hard to improve U.S.-China relations. And over these 40 years, if you look at it, you can see the relationship moving up, up, up, up all the time.

There are occasional bounces up and down. But generally it is upward curve. So we should be -- we should continue to work at it, because it is important. But we take the political rhetoric as they come.

AMANPOUR: All right. Mr. Tung, so much more to talk to you about; hopefully, you'll come on our program again. Thank you very much indeed for joining me.

TUNG: Not at all. Thank you. Thank you.

AMANPOUR: And while China seeks redress for all grievances and strives for stability at home, its sometime partner, Russia, has its own share of political unrest. When we come back, we'll meet a thorn in President Putin's side, a socialite turned reformer, after a break.




AMANPOUR: Welcome back to the program. "Russia, without Putin," that was the rallying cry from tens of thousands of pro-democracy protesters, who flooded the center of Moscow this weekend. It was the first time since June that the movement had taken to the streets.

Among the many protesters was Ksenia Sobchak. She's a well-known socialite, often called the Paris Hilton of Russia, who shocked Russians when she joined the opposition movement six months ago.

Ksenia told me that her efforts are not specifically against Putin himself, but rather aimed at reforming the political system in Russia overall.


AMANPOUR: Ksenia Sobchak, thank you very much for joining me from Moscow.


AMANPOUR: What are the intention of these rallies? Specifically what do you want?

SOBCHAK: So it's a political reform on a huge basis. It's the -- how to say in English; I'm sorry. My English is a bit rusty -- is -- it is overview of the election process of parliament. Parliament elections is one thing on which all the opposition leaders agree, that there were so many falsifications that a new parliament should be elected.

AMANPOUR: Let me ask you this. Your father, Anatoly Sobchak, was a mentor of President Putin. Your mother is also a pro-Kremlin member of parliament.

Are you against President Putin? Are you trying to bring down President Putin? Or what is your aim, your personal involvement?

SOBCHAK: My personal involvement is that I don't think that you can be against some person because this, then, is not politics. It's like individual hatred or whatsoever. I'm not against Putin. I'm against system. And I don't think that Putin and system are all the same. It's like one word of the same things.

No, I think we should concentrate on fighting not with one man, but with the system. I'm quite sure that even if we fantasize about hesitation (ph), that Putin tomorrow goes out to the people and says, OK, I understood everything and I quit, the other person who would come on his place, in the same corrupt and ineffective system, would be the same kind of authoritarian rule in couple of years.

So this doesn't work. I want to change the system. I want to change it on evolutionary basis, which is very important, because revolutions has already taken place in our country and I don't want any revolution anymore in my country.

AMANPOUR: OK. I want to get to that -- I want to get to the process of this evolution.

But first I need to ask you, because you are well-known in Russia and now around the world for having had a fairly raunchy part. You've done reality shows of questionable taste. You've been a socialite and a party girl.

And some people are saying do you have the credentials to be a serious political activist? Are you able to do this seriously and how do you answer those who question your role at the moment?

SOBCHAK: I think that any person at any time of his life can change and I think that my behavior is a kind of example of how it can be. So I'm not sure if I can be effective in what I'm doing now. I'm not sure that I know enough to do it effectively. But I'm really trying to and I'm really learning to.

And, yes, my past was never connected with politics. But I got an education on politology, so in my student years, I had some education basis on this subject.

AMANPOUR: And of course, from your father, Anatoly Sobchak --

SOBCHAK: Yes. What really matters at this moment, that many people in my country are frightened. They're afraid to lose their jobs and they know that they can be punished for saying out what they think.

And my example is an example of a person who lost a lot of things, but who is not afraid. And I think for my generation, it's very important. We can't change what we were, but we can change what we are going to be. So I am changing this in my life. And I hope that I would go on and go on.

AMANPOUR: Well, let me ask you, you talk about being punished -- and you yourself have been certainly under the sights, if you like, of the authorities. They raided your apartment.

SOBCHAK: Well, they not only raided my apartment, they robbed me because already three months, my money, they don't give me back my money, but they don't make any investigation on this.

So this is the kind of ridiculous situation when, in a country, which is considered to be a democratical (sic) country, they take away your money and they don't even explain why they do this.

AMANPOUR: Yes. Let's get back to President Putin. Polls show that actually his popularity is still quite high. He still is viewed as a strong leader and Russians seem to want a strong leader.

SOBCHAK: I agree with you, that the popularity of Mr. Putin is quite high and I don't think actually anything wrong with this. I'm not arguing about he's not popular or he is. I just want, for example, our TV to be honest and to have no censorship, so that other people, who criticize our president, for example, could also express their opinion on federal channels.

So I think what I am fighting for is the freedom of the media in my country.

And when all the federal channels are under control, it's quite difficult to speak to the big masses of people about what's really important. And that's why, actually, maybe this popularity of our president is so high. We can't know it until we have fair media channels.

AMANPOUR: Ksenia, are you still personally close to President Putin? As I said and mentioned, he has a close relationship with your family. And do you fear for your life, being this public opposition activist now?

SOBCHAK: Well, I do fear for my life but, you know, only fool people don't fear. But the coward one and others just go on. So I fear but I go on and that's OK. And about my relationship, I didn't have any close relationship, fortunately or unfortunately, all those years.

My mother was linked with our president and I also saw him on some reunions of our family dates. And I'm very grateful to Mr. Putin for how he helped my father in their lifetime. But, again, it's not -- my protest is not against this person. It's against this system.

AMANPOUR: So let me ask you --

SOBCHAK: And I think it's quite different kind of thing.

AMANPOUR: -- about the system, we all know and it's been reported and we've reported, obviously, what happened to Pussy Riot and the members who were sentenced to jail. Prime Minister Medvedev has just said that they've served enough time and they should probably be let out.

Were you surprised by that and do you think it'll have an effect?

SOBCHAK: Well, I was surprised and it actually proves the gossip that Mr. Medvedev and Mr. Putin are not on really good terms right now, because it is highly discussed in Russia that there is some kind of tensions between those two.

AMANPOUR: But you think they'll be let out of jail?

SOBCHAK: Unfortunately, no. I think that system in Russia thinks that any kind of stepbacks (ph) are a signal to others that they are weak. So when they decide something, they never get a -- how to say -- they never take a step back.

AMANPOUR: Ksenia Sobchak, thank you so much for joining me.

SOBCHAK: Thank you.



AMANPOUR: And a final thought tonight, it's been a week since the September 11th attack on the U.S. consulate in Libya that left four Americans, include Ambassador Chris Stevens, dead; a week since the wave of protests swept across the globe, sparked by a crude, deliberately provocative Internet video that mocked the Prophet Muhammad.

As awful as the demonstrations were, there was also a counter demonstration.

In Benghazi, the same city where the consulate attack took place, disavowing the violence and supporting the United States.

And now "Newsweek" has run a cover story on Muslim rage and their Twitter account seemed to invite more controversy using the hashtag "#MuslimRage, but instead of bricks and stones, what they got was a wave of sarcasm and self-deprecating humor, like the tweet that turned angry Muslim demonstrators into rock stars at a Muslim rave, or the Muslim who tweeted her mock outrage: "Having a really good hair day." But no one knows because you wear a hijab, she tweeted.

In some of the tweets, the humor was more barbed, like the one that complains, "You lose your nephew at the airport but you can't yell his name because it's JIHAD."

It is easy, even tempting at times to judge a whole group by the inexcusable actions of a few. But as these tweets show, there is hope when the vast majority refuses to surrender its identity and its humanity. And there will be further provocations, and it's my fervent hope that those will be met by peaceful response on the street and the voices of reason will drown out the voices of rage.

That's it for tonight's program. Meantime, our inbox is always open, Thanks for watching. Goodbye from New York.