>>> GETTING INTO CHINA IS ALL BUT IMPOSSIBLE FOR MOST WESTERN JOURNALISTS. >> THIS IS THE FINANCIAL AND
ECONOMIC CAPITAL OF CHINA. >> BUT WHEN THE U.S. AMBASSADOR NICHOLAS BURNS INVITED US TO COME FOR A VISIT AND AN
INTERVIEW, WE WERE GRANTED VISAS. >> IS IT OUR MOST COMPETITIVE RELATIONSHIP IN THE WORLD RIGHT
NOW? >> THIS IS THE MOST IMPORTANT, MOST COMPETITIVE, AND MOST DANGEROUS RELATIONSHIP THAT THE
UNITED STATES HAS IN THE WORLD RIGHT NOW AND WILL, I THINK, FOR THE NEXT DECADE OR SO. >>> WHAT HAPPENS IF VLADIMIR
PUTIN ENTERS ANOTHER COUNTRY BESIDES UKRAINE BY FORCE? HE ALREADY HAS. 15 YEARS AGO, RUSSIA INVADED
NEIGHBORING GEORGIA. IT HAS MILITARY STATIONED THERE AND CONTROLS 20% OF THE COUNTRY. WHAT'S NEXT?
>> THE RUSSIANS ARE BUYING APARTMENTS HERE IN EVERY 33 MINUTES, AND THEY'RE REGISTERING A BUSINESS IN EVERY 26 MINUTES.
SO WE ARE ON THE BRINK OF A VERY DANGEROUS SITUATION HERE IN GEORGIA. >> I'M LESLEY STAHL.
>> I'M BILL WHITAKER. >> I'M ANDERSON COOPER. >> I'M SHARYN ALFONSI. >> I'M JON WERTHEIM.
>> I'M CECILIA VEGA. >> I'M SCOTT PELLEY. THOSE STORIES TONIGHT ON "60 MINUTES."
>>> AMERICAN CEOs USED TO SWOON OVER CHINA. ITS VAST POOL OF CONSUMERS HAS BEEN A MAGNETIC DRAW FOR
DECADES. BUT DOING BUSINESS THERE HAS BECOME SO FRAUGHT AND RISKY, WITH INTELLECTUAL PROPERTY THEFT
AND AN EXPANDED ESPIONAGE LAW USED TO INTIMIDATE THE BUSINESS COMMUNITY, THAT U.S. COMPANIES HAVE PRESSED THE PAUSE BUTTON.
ON TOP OF THAT, THE U.S.-CHINA RELATIONSHIP HAS BECOME CONTENTIOUS DUE PARTLY TO CHINA'S BELLIGERENT ACTIVITY
TOWARD TAIWAN AND IN THE SOUTH CHINA SEA. THE BALLOON SPY INCIDENT OF LAST YEAR, AND THE LIST GOES ON.
MAKING MATTERS WORSE, THE CHINESE ECONOMY HAS HIT A WALL. EXPORT GROWTH IS SLOWING. THE COUNTRY'S DROWNING IN DEBT,
AND YOUTH UNEMPLOYMENT HAS SOARED. GETTING INTO CHINA TO TELL THAT STORY IS ALL BUT IMPOSSIBLE FOR
MOST WESTERN JOURNALISTS. BUT AS WE FIRST REPORTED IN FEBRUARY, WHEN THE U.S. AMBASSADOR, NICHOLAS BURNS,
INVITED US TO COME FOR A VISIT AND AN INTERVIEW, WE WERE GRANTED VISAS. WE SPOKE WITH HIM AT HIS
RESIDENCE IN BEIJING. >> MORE MONEY IS LEAVING CHINA FOR THE FIRST TIME IN 40 YEARS THAN IS COMING IN FROM AMERICAN,
JAPANESE, EUROPEAN, KOREAN INVESTORS. >> NOW, WHY IS THAT, AND HOW MUCH OF A PROBLEM IS THAT FOR
THEM? >> THAT'S A REAL PROBLEM FOR THIS ECONOMY. THEY HAVE 1.4 BILLION PEOPLE
HERE. THEY'VE GOT TO KEEP IT GROWING, AND FOREIGN CAPITAL IS IMPORTANT.
YOU ASK WHY. I THINK THERE'S BEEN A CONTRADICTION IN THE MESSAGING FROM THE GOVERNMENT HERE IN
CHINA TO THE REST OF THE WORLD. ON THE ONE HAND, THEY SAY, WE'RE OPEN FOR BUSINESS. WE WANT AMERICAN, JAPANESE
BUSINESSES HERE. BUT ON THE OTHER HAND, THEY'VE RAIDED SIX OR SEVEN AMERICAN BUSINESSES SINCE LAST MARCH.
>> RAIDED? >> RAIDED. >> YOU MEAN -- >> THEY'VE GONE INTO AMERICAN
COMPANIES AND SHUT THEM DOWN AND MADE ACCUSATIONS WE BELIEVE ARE VERY MUCH UNWARRANTED. >> Reporter: THE AMERICAN
COMPANIES INCLUDE BAIN & COMPANY AND THE MINTZ GROUP, A COMPANY THAT DOES DUE DILIGENCE FOR OTHER COMPANIES THAT MIGHT WANT
TO INVEST HERE WAS RAIDED LAST YEAR. FIVE OF ITS CHINESE EMPLOYEES WERE TAKEN INTO CUSTODY, AND
THEY'RE STILL THERE. ANOTHER FIRM, CAPVISION, WAS RAIDED. LEST THE MESSAGE WASN'T LOUD AND
CLEAR, A REPORT ABOUT IT WAS PUT ON STATE-RUN TELEVISION. IT ACCUSED WESTERN CONSULTING FIRMS OF ESPIONAGE AND STEALING
NATIONAL SECURITY AND MILITARY SECRETS. >> THEY WANT THE INVESTMENT TO COME BACK, AND THEY'RE RAIDING
AMERICAN COMPANIES? >> YES. >> AND THEY'RE- >> THEY'VE PASSED AN AMENDMENT
TO THEIR COUNTER-ESPIONAGE LAW, AND IT'S WRITTEN IN SUCH A GENERAL WAY THAT IT COULD BE THAT AMERICAN BUSINESS PEOPLE
COULD BE ACCUSED OF ESPIONAGE FOR ENGAGING IN PRACTICES THAT ARE PERFECTLY LEGAL AND ACCEPTABLE EVERYWHERE ELSE IN
THE WORLD -- COLLECTING DATA TO DUE DILIGENCE SO THAT YOU CAN DECIDE WHETHER YOU WANT TO INVEST IN A COMPANY OR FORM A
JOINT VENTURE, RIGHT? >> WHAT DO YOU THINK THE CHINESE ARE AFRAID THAT THESE COMPANIES ARE GOING TO FIND OUT, THESE DUE
DILIGENCE COMPANIES? WHAT ARE THEY WORRYING ABOUT? >> YOU KNOW, I THINK THEY WANT TO CONTROL DATA ABOUT THE
CHINESE PEOPLE, ABOUT CHINESE COMPANIES. AND SO THAT, I THINK, IS AT THE HEART OF THE PROBLEM OF THOSE
AMERICAN COMPANIES OPERATING IN THAT SPHERE. >> Reporter: AMBASSADOR BURNS TOLD US THAT'S JUST ONE OF THE
CONCERNS HE HEARS ABOUT. >> THERE IS STILL INTELLECTUAL PROPERTY THEFT FROM AMERICAN COMPANIES HERE.
>> IS EVERY AMERICAN COMPANY AFRAID OF THAT? >> YES. >> Reporter: ALL KINDS OF U.S.
COMPANIES BEGAN FLOCKING TO CHINA IN THE EARLY 1980s AFTER THE COUNTRY OPENED TO THE WEST UNDER THEN-LEADER DENG XIAOPING.
AND NOW U.S. BANKS OPERATE HERE. WALMART HAS NEARLY 300 STORES ACROSS THE COUNTRY. SHOPPERS HERE IN SHANGHAI CAN
BUY LEVI'S, BROWSE IN AN APPLE STORE, AND GET A CARAMEL FRAPPUCCINO. >> STARBUCKS HAS 6,000 STORES IN
CHINA, 1,000 STORES IN SHANGHAI, AND THEY WANT TO KEEP BUILDING BECAUSE COFFEE -- THIS WAS A TEA CULTURE.
>> RIGHT, YES. >> FOR HUNDREDS OF YEARS. IT'S NOW BECOMING, AT LEAST FOR THE YOUNG CHINESE, A COFFEE
CULTURE. >> AND THEY LOVE STARBUCKS? >> THEY LOVE STARBUCKS, AND I'LL BUY YOU A CAPPUCCINO.
>> I'LL TAKE ONE. THANK YOU. >> Reporter: BOEING'S HERE. SO IS TESLA, PFIZER, CHEVRON,
INTEL. BUT WHILE SOME BUSINESSES ARE THRIVING, MANY OF THE FOREIGN COMPANIES ARE WORRIED ABOUT THE
BUSINESS CLIMATE UNDER PRESIDENT XI JINPING. >> IF YOU TRACK CHINA FROM THE DEATH OF MAO TO THE OPENING OF
CHINA TO THE WORLD, WE'VE SEEN A CLOSING OF SORTS. WE'VE SEEN A CENTRALIZATION OF POWER OF THE PARTY.
WE'VE SEEN INCREASED REPRESSION OF THE PEOPLE OF CHINA HERE. THAT'S A VERY SIGNIFICANT TREND, JUST OVER THE LAST DECADE.
>> WITH XI? >> UNDER HIS LEADERSHIP. >> Reporter: PART OF THAT TREND INCLUDES PRESIDENT XI'S
REVERSING MANY OF THE MARKET REFORMS THAT UNLEASHED CHINA'S ECONOMIC MIRACLE. >> THEY'VE BEEN GROWING OVER 40
YEARS, THE FASTEST GROWTH RATE RECORDED IN ECONOMIC HISTORY. 8, 9, 10% GROWTH RATES. THEY'VE LIFTED PEOPLE OUT OF
POVERTY. THAT GROWTH RATE IS SLOWING DOWN. MOST ECONOMICS ARE PROJECTING
THERE WILL BE A 2%, 3%, 4% GROWTH RATE, MAYBE EVEN LOWER. >> CAN THEY SUPPORT THEIR SOCIETY IF IT'S THAT LOW?
>> THAT'S GOING TO BE DIFFICULT FOR THEM. >> IF THERE WAS SO MUCH EXPLOSIVE GROWTH, IF SO MANY
PEOPLE WERE LIFTED OUT OF POVERTY, WHY IS HE TURNING AWAY FROM WHAT WORKED? >> WELL, I THINK THEY'VE GOT
MAYBE COMPETING PRIORITIES. THE GOVERNMENT HERE IN CHINA CERTAINLY WANTS THE ECONOMY TO GROW, BUT THEY ALSO HAVE A
NATIONAL SECURITY MIND-SET. THEY WANT TO CONTROL DATA. >> BUT THAT'S MORE IMPORTANT, THE CONTROL, RIGHT, THAN
ECONOMIC GROWTH? IT SEEMS THAT WAY. >> I THINK IT'S OPEN FOR DEBATE. YOU'RE HEARING -- WE ARE HEARING
BOTH MESSAGES. >> IT SOUNDS AS IF YOU, YOURSELF, DON'T KNOW THE DIRECTION IT'S GOING.
>> WHAT I PERCEIVE HERE IS THAT THE GREATER ENERGY IS WITH THOSE ON THE NATIONAL SECURITY SIDE OF THE GOVERNMENT OF CHINA.
>> GOOD MORNING. HOW ARE YOU? >> Reporter: ON A TRAIN TRIP FROM BEIJING TO SHANGHAI, THE
AMBASSADOR POINTED OUT THAT IN THE DECADES BEFORE PRESIDENT XI, CHINA POWERED ITS ECONOMY BY INVESTING IN THESE HIGH-SPEED
TRAINS, ROADS, FACTORIES, AND SKYSCRAPERS THAT LIGHT UP SHANGHAI, THE FINANCIAL CAPITAL OF CHINA.
BUT UNDER PRESIDENT XI, CHINA LOST MORE THAN $120 BILLION WORTH OF LONG-TERM FOREIGN INVESTMENTS LAST YEAR BECAUSE OF
THE WEAKENING ECONOMY AND THE HARSH GOVERNMENT TACTICS WHICH HAVE LEFT AMERICAN COMPANIES UNCERTAIN OF THE FUTURE THERE.
>> THERE ARE A LOT OF AMERICAN COMPANIES HERE. HAVE A LOT OF THEM JUST PICKED UP AND LEFT BECAUSE OF THIS
CURRENT BUSINESS ENVIRONMENT? >> YOU KNOW, THAT'S INTERESTING. NOT MANY. >> NOT MANY?
>> NOT MANY. >> WHY NOT? >> CHINA IS THE SECOND LARGEST ECONOMY IN THE WORLD.
IT'S A BIG MARKET. SO A FEW AMERICAN COMPANIES HAVE LEFT, BUT MOST HAVE STAYED. >> Reporter: SOME AMERICAN
COMPANIES ARE MOVING AT LEAST SOME OF THEIR OPERATIONS TO SINGAPORE, VIETNAM, MEXICO. >> BUT THEY'RE NOT LEAVING
CHINA? >> THEY DON'T WANT TO LEAVE. >> THE MARKET'S SO IRRESISTIBLE TO AMERICAN BUSINESS PEOPLE.
IT'S GIGANTIC. >> MAYBE THEY'RE NOT LEAVING, BUT THEY'RE NOT INVESTING. THEY'RE NOT MAKING MAJOR
INVESTMENTS UNTIL THEY CAN SEE EXACTLY WHERE THE GOVERNMENT IS HEADED. >> Reporter: YET BECAUSE OF THE
1.4 BILLION POTENTIAL CONSUMERS, SOME COMPANIES LIKE DISNEY ARE INCREASING THEIR INVESTMNT. >> WELCOME TO SHANGHAI DISNEY
RESORT. >> Reporter: IT RECENTLY EXPANDED ITS SHANGHAI DISNEYLAND THAT THEY TOLD US IS THRIVING.
APTAR, A $9 BILLION COMPANY HEADQUARTERED IN CRYSTAL LAKE, ILLINOIS, IS ANOTHER AMERICAN FIRM BUCKING THE TREND OF
CAPITAL FLIGHT. PRESIDENT OF APTAR ASIA ZIANGWEI GONG, A CHINESE-BORN U.S. CITIZEN, SHOWED US AROUND ONE OF
THEIR FIVE MANUFACTURING SITES IN CHINA. >> WE ARE MANUFACTURING FOR SOME OF THE LARGEST U.S. BRANDS,
ACTUALLY THE U.S. CONSUMERS BRANDS. >> Reporter: THIS FACTORY MAKES THE PACKAGING AND DISPENSING
DEVICES FOR FOOD, PHARMACEUTICAL, AND BEAUTY PRODUCTS SOLD IN ASIA. >> ALL OF OUR CUSTOMERS LIKE ARE
ALL HERE DOING BUSINESS. >> Reporter: APTAR, IN CHINA FOR NEARLY 30 YEARS, RECENTLY INVESTED $60 MILLION IN A NEW
FACTORY. ZIANGWEI GONG SAYS EVEN IN A SLOWING ECONOMY, THE COMPANY IS DOING WELL.
>> AMERICAN COMPANIES HERE, AS THE AMBASSADOR WELL KNOWS, ARE PAUSING OR CUTTING BACK ON INVESTMENT, BUT NOT THIS FIRM.
YOU'RE EXPANDING. >> WELL, BECAUSE WE ARE HERE FOR THE LONG TERM AND WE BELIEVE IN THE CONSUMPTION POWER OF THE
RISING MIDDLE CLASS. IT'S 1.4 BILLION PEOPLE HERE, AND IMAGINE, FOR EXAMPLE, HEALTH CARE.
AND THE SAME WITH COSMETICS AND BEAUTY AND BEVERAGE, ALL THOSE SECTORS, PACKAGED FOODS. THESE ARE REALLY THE BIGGEST
MARKETS. AND SO WE ARE VERY CONFIDENT ABOUT THE LONG TERM. >> WHAT DOES IT SAY ABOUT THE
CONFIDENCE REALLY IN THE U.S.-CHINA RELATIONSHIP? IT SEEMS TO SAY YOU BELIEVE THAT THINGS WILL -- WHAT?
I'M ASKING. GET BETTER? >> THAT'S A GREAT QUESTION FOR THE AMBASSADOR.
I BELIEVE SO. I HOPE SO. >> YOU KNOW, WE'LL SEE. >> Reporter: ACTUALLY, BURNS
SAYS HE'S WARY OF THE FUTURE AS THE FUNDAMENTAL RIVALRY AND MISTRUST BETWEEN THE U.S. AND CHINA IS SHAKING THE CONFIDENCE
OF THE BUSINESS WORLD AND HAS PUSHED OUR RELATIONSHIP TO ITS LOWEST POINT IN HALF A CENTURY. >> IS IT OUR MOST COMPETITIVE
RELATIONSHIP IN THE WORLD RIGHT NOW? >> THIS IS THE MOST IMPORTANT, MOST COMPETITIVE, AND MOST
DANGEROUS RELATIONSHIP THAT THE UNITED STATES HAS IN THE WORLD RIGHT NOW AND WILL, I THINK, FOR THE NEXT DECADE OR SO.
>> I WANT TO QUOTE YOU BACK TO YOU, AND TELL US WHAT YOU MEANT. YOU HAVE SAID "DIVORCE IS NOT AN OPTION."
>> RIGHT. OUR TWO COUNTRIES HAVE TO LIVE TOGETHER. AND THIS, I THINK, IS THE
GREATEST TENSION IN THE U.S.-CHINA RELATIONSHIP. CHINA IS OUR MOST SIGNIFICANT COMPETITOR AND, AT THE SAME
TIME, CHINA IS OUR THIRD LARGEST TRADE PARTNER, 750,000 AMERICAN JOBS AT STAKE. AGRICULTURE.
CHINA IS THE LARGEST MARKET FOR U.S. AGRICULTURE. ONE-FIFTH OF ALL OF OUR EXPORT PRODUCTS FROM AGRICULTURE ARE
SENT TO CHINA. THAT WAS $40.9 BILLION LAST YEAR. >> SO WE CAN'T AFFORD REALLY TO
HAVE A REAL BREAK HERE? >> WELL, IT'S COMPLICATED. >> ALL THOSE JOBS WOULD -- >> IT'S COMPLICATED.
SOME PEOPLE ARE SAYING, WELL, WE'RE SO COMPETITIVE WITH CHINA, WE SHOULD END THE ECONOMIC RELATIONSHIP.
WELL, THE CONSEQUENCE OF THAT WOULD BE 750,000 AMERICAN FAMILIES WOULDN'T BE ABLE TO PUT DINNER ON THE TABLE.
AND SO THIS MAKES FOR AN EXTRAORDINARILY DIFFICULT BALANCING ACT IN MY JOB. >> YOU'RE A WALLENDA BROTHER.
>> I'VE NEVER THOUGHT OF MYSELF THAT WAY. >> BUT YOU'RE UP ON THAT TIGHT ROPE.
>> HIGH WIRE, RIGHT? WELL, WE HAVE COMPETING INTERESTS HERE, AND BALANCING THOSE INTERESTS IS THE REALITY
IN THE U.S.-CHINA RELATIONSHIP. IF WE'RE GOING TO COMPETE, WE HAVE TO COMPETE RESPONSIBLY AND KEEP THE PEACE BETWEEN OUR
COUNTRIES. BUT WE ALSO HAVE TO ENGAGE. >> Reporter: MORE ABOUT THE BALANCING ACT AND THE BIGGEST
ECONOMIC PROBLEM IN CHINA TODAY WHEN WE COME BACK.
>>> 1 IN EVERY 5 PEOPLE IN THE WORLD IS CHINESE. CHINA'S POPULATION IS FOUR TIMES THAT OF THE U.S., AND THE
COUNTRY IS VAST, 3.7 MILLION SQUARE MILES. IT OVERLOOKS THE TAIWAN STRAIT, WHERE HALF THE WORLD'S TRADE
FLOWS EVERY DAY, AND IS LOCATED ABOUT 100 MILES AWAY FROM TAIWAN. PRESIDENT XI LIKES TO SAY THAT
THE EAST IS RISING, THE WEST IS DECLINING. BUT ECONOMICALLY, THE U.S. IS THRIVING COMPARED TO CHINA.
IN DECEMBER, MOODY'S, THE CREDIT RATING AGENCY, CUT ITS OUTLOOK FOR CHINA TO NEGATIVE, AND IT'S FACING A LONG-TERM DEMOGRAPHIC
BIND. A DECLINE IN THE BIRTHRATE THAT EXPERTS SAY IS IRREVERSIBLE, MEANING THE COUNTRY IS BOTH
AGING AND SHRINKING. AMBASSADOR NICHOLAS BURNS TOOK US ON A TOUR STARTING IN BEIJING.
THE AMBASSADOR AND HIS WIFE, LIBBY, LIKE TO TAKE EARLY MORNING WALKS THROUGH A PARK NEAR THEIR RESIDENCE.
♪ >> THIS IS A 600-YEAR-OLD MING DYNASTY PARK CALLED RITAN PARK. IT'S A PLACE FOR A LOT OF
RETIREES AND A LOT OF YOUNG PEOPLE, AND IT'S TREMENDOUSLY ACTIVE. >> Reporter: IT'S WHERE THE
LOCALS COME FOR THEIR EARLY MORNING ROUTINES, LIKE TAI CHI, YO-YO-ING, AND PING PONG. [ SPEAKING IN A GLOBAL
LANGUAGE ] >> Reporter: YOU COULDN'T TELL FROM THESE SCENES THAT CHINA, WHERE THE COVID PANDEMIC BEGAN,
IS STILL EMERGING FROM THE TRAUMA OF PRESIDENT XI JINPING'S OPPRESSIVE ZERO-COVID POLICY. BURNS, 68, A CAREER DIPLOMAT WHO
HAS SERVED IN BOTH REPUBLICAN AND DEMOCRATIC ADMINISTRATIONS, GOT TO CHINA AT THE HEIGHT OF THE ZERO-COVID LOCKDOWNS AND
QUARANTINES. >> WHEN MY WIFE, LIBBY, AND I ARRIVED HERE IN EARLY MARCH OF 2022, WE WERE QUARANTINED IN
THIS HOUSE FOR 21 DAYS, FOR THREE WEEKS. SHANGHAI, A CITY OF 26 MILLION PEOPLE, WAS COMPLETELY LOCKED
DOWN FOR 63 DAYS. >> WHAT WAS THAT LIKE IN THE CITY? >> WE HAD WOMEN WHO NEEDED TO
GIVE BIRTH, AND WE HAD TO FIND A WAY TO GET THEM TO THE HOSPITAL. WE HAD AMERICANS WHO WANTED TO GET OUT BUT HAD TO FIND A WAY
OUT OF THEIR LOCKED COMPOUNDS TO THE AIRPORT. SO ZERO-COVID WORKED FOR A WHILE.
IN '20 AND '21, THEY HAD RELATIVELY LOW INFECTION RATES. >> BUT BY 2022, IT HAD REALLY DIVIDED THIS SOCIETY.
>> Reporter: IT SET OFF RARE, WIDESPREAD PROTESTS. THEN IN DECEMBER OF 2022, PRESIDENT XI ENDED THE POLICY
ABRUPTLY. >> THE LAST THING THIS GOVERNMENT IS GOING TO ACCEPT HERE IS VOLATILITY.
>> Reporter: VOLATILITY IS SOMETHING JOERG WUTTKE, A GERMAN BUSINESSMAN WHO HAS LIVED AND WORKED IN CHINA FOR OVER 30
YEARS, HADN'T SEEN SINCE THE TIANANMEN SQUARE UPRISING IN 1989. HE REPRESENTS BASF, THE WORLD'S
LARGEST CHEMICAL PRODUCER. >> YOU HAVE SAID THIS IS A PTSD COUNTRY, POST-TRAUMATIC STRESS DISORDER COUNTRY.
WHAT DO YOU MEAN? >> WELL, EVERYBODY HAS BEEN TRAUMATIZED BY THE LOCKDOWNS THAT TOOK PLACE IN MANY CITIES
ACROSS CHINA, AND THE KIND OF MESSAGING THAT CAME OUT OF THE LEADERSHIP, IT'S FOR YOUR OWN SAFETY.
AND THEN THE LOCKDOWN WAS LIFTED. ACTUALLY IT WAS MORE A CAPITULATION FROM THE
GOVERNMENT. THE LOCKDOWN BASICALLY LEFT. >> THEY SAID, WE WERE WRONG. THEY'RE GOING TO LIFT IT.
>> THEY NEVER SAID THEY WERE WRONG. THAT'S NOT THE SYSTEM TO ADMIT THEY DID SOMETHING WRONG.
AND THEN LIKE A EXCUSE ME, COVID WAS ROLLING ACROSS THE COUNTRY. >> AFTER THEY LIFTED IT? >> DECEMBER, JANUARY, I WOULD
SAY A BILLION PEOPLE WERE INFECTED, AND CERTAINLY LOTS OF OF PEOPLE DIED. >> Reporter: INDEPENDENT
ANALYSTS SAY THAT AN ESTIMATED 1.4 MILLION PEOPLE DIED. >> THIS KIND OF ENVIRONMENT REALLY CHANGES YOUR ATTITUDE
TOWARDS LIFE. AND IN BUSINESS, WE THOUGHT WE'RE GOING TO HAVE A COMEBACK STORY, AND WE HAD A GOOD COUPLE
OF WEEKS. AND THEN THE ECONOMY BASICALLY HAS BEEN FLAT SINCE. >> YOU KNOW, AFTER COVID IN THE
WEST, IN THE UNITED STATES PARTICULARLY, WE DID HAVE A HUGE, QUICK REBOUND. WHY DIDN'T IT HAPPEN HERE?
>> WELL, I THINK THAT COVID ALSO HAS COVERED UP A COUPLE OF LONG-TERM PROBLEMS THAT CHINA HAS BEEN BUILDING UP.
FOR EXAMPLE, IN THE REAL ESTATE SECTOR. >> Reporter: WE REPORTED ON THE REAL ESTATE SECTOR TEN YEARS AGO
WITH ASTONISHING SITES LIKE THIS OF EMPTY BUILDINGS IN CITY AFTER CITY ACROSS THE COUNTRY. THIS IS TODAY.
SIMILAR, HOLLOWED-OUT WASTELANDS OF UNOCCUPIED AND UNFINISHED APARTMENTS KNOWN AS GHOST CITIES.
>> WHEN I WAS HERE TEN YEARS AGO, I NEVER EXPECTED TO SEE THESE BUILDINGS STILL HERE. >> YEAH.
>> Reporter: WHAT WAS A HOUSING BUBBLE BACK THEN GREW AND FINALLY EXPLODED. THIS REAL ESTATE CRISIS LIES AT
THE HEART OF CHINA'S ECONOMIC DECLINE. >> HAS ANYBODY COUNTED UP THE NUMBER OF EMPTY UNITS, I MEAN
ACROSS THE WHOLE COUNTRY? >> WELL, THE WHOLE OF GERMANY, WE HAVE 82 MILLION PEOPLE COULD MOVE IN HERE RIGHT AWAY.
80 TO 90 MILLION APARTMENTS ARE EMPTY. >> 80 TO 90 MILLION APARTMENTS ARE EMPTY?
>> RIGHT, UNFINISHED. >> Reporter: OVER THE YEARS, CHINESE BANKS READILY LOANED MONEY TO THE DEVELOPERS AS THE
BUILDING BOOM CREATED MILLIONS OF JOBS AND PROPELLED CHINA'S GROWTH. BUT IN 2020, THE GOVERNMENT
UNDER PRESIDENT XI CLAMPED DOWN ON THE RAMPANT BORROWING, CAUSING THE MAJOR DEVELOPERS TO DEFAULT ON THEIR LOANS AND RUN
OUT OF MONEY. >> LOOK AT THAT. THE FACADE ISN'T EVEN FINISHED. >> YEAH.
>> Reporter: HE SAYS THEY COULDN'T EVEN AFFORD TO TAKE DOWN THE CRANES. IN JANUARY, EVERGRANDE, ONCE
CHINA'S LARGEST DEVELOPER, WAS ORDERED TO LIQUIDATE ITS REMAINING ASSETS. LEFT IN THE LURCH ARE MILLIONS
OF CHINESE CITIZENS WHO BOUGHT THESE APARTMENTS BEFORE THEY WERE BUILT. >> THE DEVELOPERS OWE THEIR
CUSTOMERS THAT PAID UP TO THE MAGNITUDE OF 1 TRILLION U.S. DOLLARS. SO IF I DID A DOWN PAYMENT ON
ONE OF THESE APARTMENTS -- >> RIGHT. >> -- WILL I EVER SEE THAT MONEY?
>> NO, YOU WILL NOT SEE THE MONEY. >> IT'S GONE. IT'S VANISHED.
>> IT'S GONE. IT'S FINISHED. IT'S REALLY DRAMATIC. >> TEN YEARS AGO, WE WERE TOLD
THAT THIS WAS THE WAY PEOPLE PUT MONEY DOWN FOR THEIR NEST EGG. >> RIGHT. >> FOR THEIR RETIREMENT FUND.
IS THAT STILL THE CASE? >> 66%, TWO-THIRDS OF FAMILY HOUSEHOLD AVERAGE WEALTH IS IN APARTMENTS.
>> Reporter: THAT LOSS OF WEALTH HAS DEPRESSED CONSUMER SPENDING AND DRAGGED DOWN THE ECONOMY. WE WONDERED IF THE PEOPLE BLAME
PRESIDENT XI FOR THAT OR FOR THE COVID DEATHS. BUT IT WAS IMPOSSIBLE FOR US TO GAUGE PUBLIC OPINION OR IF IT
EVEN MATTERS. WHILE NO ONE FROM THE GOVERNMENT WOULD GIVE US AN INTERVIEW, WE WERE ABLE TO LEARN, AS JOERG
WUTTKE, WHO HAS LIVED HERE FOR 30 YEARS TOLD US, IT'S NOT A GOOD IDEA TO BET AGAINST THE CHINESE PEOPLE.
>> WHAT ARE SOME OF THE POSITIVE ASPECTS OF THE ECONOMY HERE? THEY DO HAVE A STRONG MANUFACTURING BASE STILL.
>> WELL, THE BIG PART IS BETWEEN THE EARS OF PEOPLE, THE BRAINS OF THE CHINESE ENTREPRENEUR THAT ACTUALLY MADE THIS SUCCESS STORY
HAPPEN. CHINA IS NOT REALLY GOOD IN BASIC RESEARCH, BUT THEY'RE FANTASTIC IN DEVELOPMENT.
THEY'RE WORLD CHAMPION IN ACTUALLY MAKING PRODUCTS BETTER, FASTER, AND CHEAPER. >> ARE THEY BETTER?
>> YES, THEY ARE IN SOME AREAS. OUR CHINESE COMPETITORS ARE BREATHING DOWN OUR NECK AND BASICALLY DRIVE SOME OF US OUT
OF THE MARKET. >> Reporter: FOR INSTANCE, CHINA NOW MAKES OVER 80% OF ALL THE SOLAR PANELS IN THE WORLD.
IT DOMINATES THE WIND TURBINE MARKET AND LAST YEAR, BECAME THE WORLD'S BIGGEST EXPORTER OF CARS AND MORE.
>> THEY'RE THE LEADING TRADE PARTNER OF TWICE AS MANY COUNTRIES IN THE WORLD AS THE UNITED STATES.
SO THEY HAVE -- >> THEY'RE THE LEADING TRADE PARTNER. >> WITH OVER 60 COUNTRIES IN THE
WORLD. >> Reporter: AND NOW WITH HEAVY GOVERNMENT SUBSIDIES, IT IS FAST BECOMING A LEADER IN ELECTRIC
VEHICLES. THE CARMAKER BYD IS VYING WITH TESLA FOR THE TITLE OF BEST-SELLING EV MAKER IN THE
WORLD. SHANGHAI-BASED NIO IS TRYING TO BREAK THROUGH WITH HIGH-TECH INNOVATIONS.
IN DECEMBER, THE COMPANY UNVEILED A NEW BATTERY WITH A DRIVING RANGE OF 620 MILES, MORE THAN 200 MILES FURTHER THAN
TESLA'S TOP-END MODEL. >> THIS IS NICE. >> THIS IS OUR FLAGSHIP. >> Reporter: WILLIAM LEE, THE
CEO AND FOUNDER OF NIO, SAYS IT'S BATTERY SWAP TECHNOLOGY ALLOWS OWNERS TO SWAP OUT THEIR DEPLETED BATTERY FOR A FULLY
CHARGED ONE IN UNDER THREE MINUTES. >> IT'S 2 1/2 MINUTES. >> 2 1/2 MINUTES?
>> YES. WE ALREADY INSTALLED 2,200 SWAP STATIONS ALL AROUND CHINA. >> Reporter: CHINA IS ALSO
DEVELOPING A HUMANOID ROBOT INDUSTRY. >> LOOK AT THAT. >> Reporter: ALEX GU IS THE
FOUNDER AND CEO OF FORIE INTELLIGENCE. LAST YEAR HE LAUNCHED THE GR1, HIS FIRST-GENERATION HUMANOID.
>> WE CAN DO ARM. HE CAN SWING THE ARM. YOU SEE? >> OH, LOOK AT THE FINGERS.
OH, MY WORD. CAN HE PLAY THE PIANO? >> YEAH. FUTURE, DEFINITELY CAN.
>> Reporter: ALSO IN THE FUTURE, HE SAYS THE ROBOTS COULD PROVIDE HEALTH CARE FOR CHINA'S RAPIDLY AGING POPULATION.
>> MAYBE WE CAN -- FOR EXAMPLE, WE CAN REMOTE CONTROL SUCH KIND OF ROBOTS AND HELP MY GRANDPA FOR EXAMPLE.
YEAH, I THINK. >> YEAH. >> Reporter: PRESIDENT XI, WHO VISITED THIS COMPANY LAST YEAR,
HAS CALLED FOR THE MASS PRODUCTION OF HUMANOIDS BY 2025. IN HIS ANNUAL NEW YEAR'S SPEECH, HE TALKED ABOUT THE COUNTRY'S
ECONOMIC WOES AND, FOR THE FIRST TIME, ACKNOWLEDGED THE HIGH UNEMPLOYMENT RATE. STILL, HE HAS LAID OUT A
LONG-TERM GOAL OF DOUBLING CHINA'S ECONOMY BY 2035 AND SURPASSING THE WEST IN TECHNOLOGY.
>> OUR COMPANIES AND TECH EXPERTS ARE COMPETING ON A.I. AND BIOTECH AND QUANTUM MATHEMATICS.
ALL THOSE TECHNOLOGICAL ADVANCES WILL LEAD TO A NEW GENERATION OF MILITARY TECHNOLOGY. OUR TWO MILITARIES ARE VYING FOR
MILITARY SUPREMACY. WHO'S GOING TO BE THE MOST POWERFUL IN THE MOST IMPORTANT, STRATEGIC PART OF THE WORLD,
WHICH IS THE INDO-PACIFIC. >> Reporter: PRESIDENTS BIDEN AND XI MET IN SAN FRANCISCO IN NOVEMBER IN HOPES OF
RE-ESTABLISHING MILITARY COMMUNICATIONS BETWEEN OUR TWO COUNTRIES, WHICH CHINA HAD CUT OFF.
>> I THINK WE'RE BACK TO A MORE SETTLED AND STABLE RELATIONSHIP BETWEEN THE TWO COUNTRIES, BUT IT'S BEEN A ROLLER COASTER.
>> Reporter: THE LOW POINT, HE SAYS, WAS THE SPY BALLOON INCIDENT LAST YEAR. BUT THERE'S ALSO BEEN THE
BUILDUP OF MILITARY BASES IN THE SOUTH CHINA SEA, THE INCREASE OF AIR SORTIES NEAR TAIWAN, AND THE BUZZING OF U.S. MILITARY PLANES.
>> DO YOU SEE A LOWERING OF THE TEMPERATURE IN THE SOUTH CHINA SEA? >> NO, AND THAT'S A PROBLEM.
>> YOU DON'T? >> AND THEN ON TAIWAN, FOLLOWING SPEAKER PELOSI'S VISIT, WE'VE SEEN NOW FOR 16 MONTHS A MUCH
HIGHER RATE OF CHINESE BOTH ARABTAIR ACTIVITY AND NAVAL ACTIVITY. IT'S VERY INTIMIDATING, MEANT TO
INTIMIDATE. >> AND THEY HAVEN'T PULLED BACK ON THAT? >> THEY HAVEN'T PULLED BACK ON
THAT, AND I THINK ULTIMATELY THEY WANT TO BECOME AND OVERTAKE THE UNITED STATES AS THE DOMINANT COUNTRY GLOBALLY, AND
WE DON'T WANT THAT TO HAPPEN. WE DON'T WANT TO LIVE IN A WORLD WHERE THE CHINESE ARE THE DOMINANT COUNTRY.
>> WHEN THE COLD WAR ENDED, WE ALL THOUGHT OUR SYSTEM HAD WON. >> YEAH. >> YOU KNOW, THEIR SYSTEM
FAILED. OUR SYSTEM ROSE UP. NOW HE'S COME BACK AND SAID, NO, NO.
THE COMMUNIST SYSTEM'S THE RIGHT WAY. I GUESS WE DIDN'T BURY THAT AFTER ALL.
>> YOU KNOW, IT'S INTERESTING. TO COMPARE THE OLD COLD WAR WITH THIS TIME, WHAT DISTINGUISHES THIS TIME VERSUS THE OLD COLD
WAR, THE SOVIET UNION HAD A STRONG MILITARY AND NUCLEAR WEAPONS. IT HAD A VERY WEAK ECONOMY,
WHICH IN NO WAY COMPETED WITH OURS. CHINA'S ECONOMY IS VERY STRONG. WE'RE DEALING WITH AN ADVERSARY,
A COMPETITOR IN CHINA, STRONGER THAN THE SOVIET UNION WAS IN THE 1940s, '50s, '60s, '70s, AND '80s.
>> SO IF THAT WAS A COLD WAR, WHAT ARE YOU CALLING THIS? >> IT'S A COMPETITION OF IDEAS, A BATTLE OF IDEAS.
OUR IDEA, AMERICA'S BIG IDEA, OF A DEMOCRATIC SOCIETY AND HUMAN FREEDOM VERSUS CHINA'S IDEA THAT A COMMUNIST STATE IS STRONGER
THAN A DEMOCRACY. WE DON'T BELIEVE THAT. SO THERE'S A BATTLE HERE AS TO WHOSE IDEAS SHOULD LEAD THE
WORLD, AND WE BELIEVE THOSE ARE AMERICAN IDEAS. >> Reporter: THE LATEST SALVOS IN THE BATTLE FOR SUPREMACY CAME
LAST MONTH WHEN CHINA CONDUCTED TWO DAYS OF LARGE-SCALE WAR GAMES AROUND TAIWAN, AND PRESIDENT BIDEN IMPOSED NEW
STIFF TARIFFS, INCLUDING A 100% TAX ON CHINESE ELECTRIC VEHICLES.
>> Announcer: LESLEY STAHL ON WITNESSING CHINA CHANGE WHILE REPORTING FOR "60 MINUTES." >> THIS WAS DIFFERENT FROM THE
OTHER TIMES I'D BEEN THERE REPORTING. >> Reporter: AT 6
CU . .
>>> THE DAY RUSSIA INVADED ONE OF ITS NEIGHBORS, WAGED A BLOODY WAR, AND SEIZED A FIFTH OF THAT NEIGHBOR'S TERRITORY, FEAR AND
SHOCK RIPPLED THROUGHOUT THE REGION. WE'RE NOT TALKING ABOUT RUSSIA'S INVASION OF UKRAINE.
RATHER, THE SMALL COUNTRY OF GEORGIA. THAT INVASION WAS MORE THAN 15 YEARS AGO.
VLADIMIR PUTIN'S PLAYBOOK HASN'T CHANGED MUCH. TODAY GEORGIA, WHICH SHARES A 556-MILE BORDER WITH RUSSIA, IS
SILL TRYING TO REMOVE THE GRIP OF THE KREMLIN. DAYS AFTER RUSSIA INVADED UKRAINE, GEORGIA SUBMITTED AN
APPLICATION TO BECOME PART OF THE EUROPEAN UNION WITH HOPES OF GAINING A WESTERN INSURANCE POLICY TO PROTECT IT.
LAST OCTOBER, WE MET WITH THE PRESIDENT OF GEORGIA, SALOME ZOURABICHVILI, THE DAUGHTER OF GEORGIAN REFUGEES RAISED IN
PARIS, SHE SAYS THAT VLADIMIR PUTIN HAS LAUNCHED A QUIET INVASION OF GEORGIA IN AN ATTEMPT TO EXTEND RUSSIA'S
REACH. >> THE WAR IN UKRAINE IS NOW MOVING INTO ITS THIRD YEAR. HOW IS THE WAR THERE IMPACTING
LIFE HERE? >> IT IS, OF COURSE, A REMINDER OF EVERYTHING THAT THIS COUNTRY HAS GONE THROUGH AND OF THE FACT
THAT IT'S ALWAYS AN IMMEDIATE DANGER AND THREAT. IT'S ALREADY PART OF THE REALITY THAT RUSSIA IS TESTING THE
GROUND. >> YOU THINK THE RUSSIANS ARE TESTING THE GROUND RIGHT NOW IN GEORGIA?
>> RIGHT NOW. >> HOW SO? >> HERE, THEIR EASY WAY IS THE HYBRID WAR.
>> Reporter: A HYBRID WAR THAT HAS INCLUDED ONLINE AND TELEVISED DISINFORMATION CAMPAIGNS AND ANTI-WESTERN
PROPAGANDA PUMPED INTO GEORGIA. A FAVORITE TACTIC OF THE KREMLIN. GEORGIANS HAVE SEEN IT BEFORE.
IN 2008, THREE WEEKS BEFORE RUSSIA LAUNCHED ITS FIRST AIR STRIKE IN GEORGIA, MOSCOW HIT THE COUNTRY WITH A SERIES OF
CYBERATTACKS. THE FIVE-DAY BLOODY BATTLE THAT FOLLOWED ENDED WITH RUSSIA SEIZING 20% OF GEORGIA'S LAND.
PRESIDENT ZOURABICHVILI SAYS THE MOSTLY MUTED INTERNATIONAL REACTION TO THAT WAR LAID THE GROUNDWORK FOR RUSSIA'S INVASION
OF UKRAINE AND VLADIMIR PUTIN'S PLAN TO BRING FORMER SOVIET REPUBLICS BACK INTO THE RUSSIAN FOLD.
TODAY, A FIFTH OF GEORGIA IS OCCUPIED BY THE RUSSIAN MILITARY AND AN ESTIMATED 8,000 RUSSIAN TROOPS ARE INSIDE THE GEORGIAN
BORDER. WE TRAVELED WITH GEORGIAN SECURITY FORCES 37 MILES OUTSIDE THE CAPITAL, TBILISI, INTO THE
TINE VILLAGE OF CURVE KHURVALETI. TODAY, IT IS A RURAL NO MAN'S LAND.
>> OH, MY. >> Reporter: ACROSS A RICKETY BRIDGE, WE FOUND AN ABANDONED STRETCH OF FARMLAND CHOKED OFF
BY BARBED WIRE. WARNING SIGNS TO STAY OUT. >> OH, THERE SHE IS. >> Reporter: AND A DEFIANT
87-YEAR-OLD VALYA VANISHVILI. >> Translator: THE RUSSIANS HAVE TOLD ME THIS IS OUR LAND. AND I SAID, NO.
YOUR LAND IS IN RUSSIA. THIS IS OUR LAND, NOT YOURS. YOU HAVE NO RIGHTS HERE. >> HOW LONG HAVE YOU BEEN
SURROUNDED BY THE BARBED WIRE? >> Translator: FOR 15 YEARS. >> Reporter: IN 2008, HER LAND WAS SEIZED BY RUSSIAN TROOPS.
THE GRANDMOTHER OF FOUR STILL REFUSES TO SURRENDR HER HOME. CUT OFF FROM FAMILY, SHE RELIES ON OUTSIDERS AND A STICK TO
DELIVER FOOD AND THE MEDICINE SHE NEEDS. SHE WHISPERED TO US THAT THE RUSSIANS WERE WATCHING US FROM
OVER THAT HILL. >> ARE YOU AFRAID OF THE RUSSIANS? IS.
>> Translator: YES, I'M AFRAID OF THEM. WHAT IF THEY TAKE ME AND DETAIN ME?
NOBODY CAN HELP ME. I'M ALONE. IF IT'S ONLY A COUPLE OF THEM, I CAN ALWAYS ANSWER THEM AND FIGHT
BACK. BUT WHEN IT'S A LOT OF THEM, THERE IS NOTHING I CAN DO. >> Reporter: GEORGIA IS BORDERED
ON THE NORTH BY RUSSIA, THE EAST BY AZERBAIJAN, AND THE SOUTH BY ARMENIA AND TURKEY. THE BRIDGE BETWEEN THE BLACK AND
CASPIAN SEA, AN IMPORTANT ROUTE FOR NATURAL GAS AND OIL. HIGH UP IN THE MOUNTAINS OF GEORGIA, WE SAW ANOTHER REASON
THE SMALL COUNTRY OF NEARLY 4 MILLION IS CRUCIAL TO THE KREMLIN. A LONG LINE OF TRUCKS, MANY OF
THEM CARRYING EUROPEAN CARGO ACROSS THE BORDER INTO RUSSIA. UNITED NATIONS DATA SHOWS THAT SINCE THE WAR BEGAN, EVERYTHING
FROM CARS TO CHEMICALS HAVE ROLLED INTO RUSSIA THROUGH GORGIA, SOME IN VIOLATION OF WESTERN SANCTIONS, A LIFELINE
FOR PUTIN'S REGIME. THERE IS TRAFFIC COMING INTO GEORGIA TOO. THOUSANDS OF RUSSIAN NATIONALS
ENTERING THE COUNTRY IN CARS AND ON FOOT, EXTENDING FOR MILES AND ARRIVING IN WAVES FIRST AT THE BEGINNING OF THE UKRAINE WAR IN
2022 AND AGAIN LATER THAT YEAR WHEN FIGHTING-AGE MEN FLED RUSSIA'S MANDATED MILITARY SERVICE.
BUT SOME GEORGIANS WORRY PUTIN LOYALISTS COULD BE ENTERING THE COUNTRY TOO, LAYING THE GROUNDWORK FOR RUSSIA'S NEXT
MOVE. WHEN VLADIMIR PUTIN INVADED UKRAINE IN 2022, HE SAID IT WAS TO, AMONG OTHER THINGS, PROTECT
THE RUSSIANS LIVING THERE. PRESIDENT ZOURABICHVILI FEARS PUTIN COULD LAUNCH A SIMILAR CAMPAIGN IN GEORGIA.
SINCE THE WAR, GEORGIA HAS BECOME HOME TO 100,000 RUSSIANS. >> IT'S VERY UNNERVING WHEN, IN YOUR OWN COUNTRY, YOU HAVE
PEOPLE THAT ARE TALKING THE LANGUAGE OF THE ENEMY AND THAT BELIEVE THAT THEY'RE AT HOME. >> THE RUSSIANS BELIEVE THAT
THEY ARE AT HOME? >> THEY'RE BEHAVING AND BELIEVING THAT THEY ARE VERY MUCH AT HOME.
SO THERE'S A FINE LINE, AND THAT LINE HAS TO BE KEPT SO THAT WE DO NOT HAVE INCIDENTS IN THE FUTURE THAT WOULD ALLOW RUSSIA
TO USE THEIR FAVORITE DOCTRINE OF PROTECTING RUSSIAN-SPEAKING CITIZENS. >> SO WHY DOESN'T GEORGIA JUST
SAY NO MORE RUSSIANS THROUGH OUR BORDER? >> THAT IS A QUESTION FOR THE AUTHORITIES.
>> AREN'T YOU THE AUTHORITY? >> NO. I DON'T HAVE THE EXECUTIVE POWERS UNFORTUNATELY.
>> Reporter: THE EXECUTIVE POWER TO CONTROL GEORGIA'S BORDER WAS SQUARELY IN THE HANDS OF ITS PRIME MINISTER, IRAKLI
GARIBASHVILI. PUBLICLY, HE SAID THAT HE SUPPORTED THE COUNTRY'S BID TO MOVE AWAY FROM NEIGHBORING
RUSSIA AND JOIN THE EUROPEAN UNION. BUT HIS ACTIONS AND INACTIONS TOLD A DIFFERENT STORY.
SINCE THE UKRAINE INVASION, PRIME MINISTER IRAKLI GARIBASHVILI AGREED TO RESUME FLIGHTS BETWEEN TBILISI AND
MOSCOW FOR THE FIRST TIME IN ALMOST FIVE YEARS. HE'S ALSO FAILED TO ADOPT STRONG SANCTIONS AGAINST RUSSIA.
CRITICS OF THE PRIME MINISTER ACCUSE HIM OF BEING IN THE POCKET OF A GEORGIAN OLIGARCH, A BILLION WHO HELPED GET HIM
ELECTED. THE 67-YEAR-OLD OLIGARCH MADE HIS FORTUNE IN RUSSIA AND SERVED A BRIEF STINT AS GEORGIA'S PRIME
MINISTER. HIS $50 MILLION HOME LOOMS OVER TBILISI, A REMINDER OF HIS WEALTH AND POWER.
IN 2022, EUROPEAN LAWMAKERS CALLED FOR SANCTIONS AGAINST THE OLIGARCH FOR HIS, QUOTE, LINKS TO THE KREMLIN, A CONNECTION
THAT COULD UNDERMINE GEORGIA'S EU BID. >> WE'RE GOING WITH A GOVERNMENT THAT'S COMPLETELY CORRUPT, A
GOVERNMENT THAT'S PRO-RUSSIAN, CLEARLY ANTI-WESTERN, CLEARLY DOES NOT REALLY CARE ABOUT WHAT THE MAJORITY OF THE POPULATION
WANTS AND NEEDS. >> Reporter: A GROUP WITH THOUSANDS OF YOUNG FOLLOWERS WORKING TOWARD GEORGIA'S ENTRY
INTO THE EUROPEAN UNION. >> IF RUSSIA WINS, IT MEANS LOSS OF FREEDOM, LOSS OF EVERYTHING THAT WE FOUGHT FOR IN THE PAST
30 YEARS BASICALLY. IT'S A FIGHT FOR VALUES. IT'S A FIGHT FOR WHERE YOU WANT TO STAND IN THIS BIG FIGHT FOR
DEMOCRACY. >> AS SOON AS WEST IN ANY FORM, BE IT THE U.S. PARTNERSHIP, BE IT EUROPEAN UNION, IS NOT
REPRESENTED IN THIS COUNTRY, RUSSIA WILL FILL THE VOID RIGHT AWAY. >> Reporter: THEY SAY THE INFLUX
OF RUSSIANS IS ALREADY CHANGING THE FACE OF GEORGIA. >> WHAT ARE THEY DOING IF WE LOOK AT IT?
THEY'RE BUYING APARTMENTS. THEY'RE BUYING PRIVATE PROPERTY. THEY'RE OPENING UP BUSINESSES. THEIR ACTIONS CHANGED GEORGIAN
ECONOMY. >> THE RUSSIANS ARE BUYING APARTMENTS HERE IN EVERY 33 MINUTES.
THEY'RE PURCHASING A PIECE OF LAND IN EVERY 27 MINUTES. AND THEY'RE REGISTERING A BUSINESS IN EVERY 26 MINUTES.
SO I THINK WE ARE ON THE BRINK OF VERY DANGEROUS SITUATION HERE IN GEORGIA. >> Reporter: ACCORDING TO PUBLIC
RECORDS, RUSSIANS HAVE REGISTERED MORE THAN 20,000 BUSINESSES IN GEORGIA OVER THE LAST TWO YEARS AND LAUNCHED FIVE
NEW RUSSIAN-ONLY SCHOOLS, NONE OF WHICH ARE LICENSED BY GEORGIA'S DEPARTMENT OF EDUCATION.
RUSSIANS HAVE DRIVEN RENT UP NEARLY 130%. PRIZES FOR EVERYTHING FROM FOOD TO CARS HAVE GONE UP 7%.
OVER 100,000 GEORGIANS HAVE LEFT THE COUNTRY BECAUSE MANY OF THEM CAN'T AFFORD TO LIVE HERE ANYMORE.
>> I'VE HEARD THIS DESCRIBED AS A QUIET INVASION. >> QUIET INVASION, YEAH. THERE'S A RISK OF THE ECONOMIC
DIVERGENCE. THERE'S A RISK OF MILITARY INTERVENTION, AND THERE'S A RISK OF GEORGIA'S STATEHOOD BEING
DESTROYED. >> Reporter: EMMANUIL LISNIF, GEORGE SMORG LENCO AND PAVEL BACK ADOVE DON'T LOOK LIKE MUCH
OF A THREAT. ALL RUSSIANS IN THEIR 20s, THEY FLED THEIR COUNTRY FOR FEAR OF BEING DRAFTED OR IMPRISONED FOR
SPEAKING OUT AGAINST PUTIN. THEY NOW LIVE IN GEORGIA AND WORK AT THIS RUSSIAN-OWNED COMEDY CLUB IN TBILISI.
>> I TRY AND SAID I'M AGAINST WART IN RUSSIA. I WAS BEATEN, AND AFTER THAT, GOING TO PRISON THREE TIMES.
>> SO THREE TIMES YOU WENT TO JAIL? >> YES. YES, THREE TIMES.
>> I BELIEVE AND I KNOW THAT RUSSIANS ACTUALLY AGAINST THE WAR >> YOU THINK THAT MOST RUSSIANS
ARE AGAINST THE WAR? >> YEAH. JUST SCARED, REALLY SCARED. >> HAVE ANY OF YOU HAD ANY
AGGRESSION TOWARDS YOU BECAUSE YOU'RE RUSSIAN? >> ACTUALLY, I HAVE A BIG WRITING ON THE WALL.
IT IS THE BIGGEST THING I SEE FROM MY WINDOW, JUST BIG "RUSSIANS GO HOME." >> Reporter: THERE IS NO
SUBTLETY IN SPRAY PAINT. ANTI-RUSSIAN GRAFFITI BLANKETS THE CITY ALONG WITH SUPPORT FOR UKRAINE.
ON CRUMBLING WALLS, THE GEORGIAN FLAG IS JOINED WITH THOSE OF THE EUROPEAN UNION, THE U.S., AND NATO.
OVER 80% OF THE GEORGIAN PUBLIC BACKS ENTRY INTO THE EU, AS DOES GEORGIAN PRESIDENT ZOURABICHVILI.
BUT HER POSITION HAS BECOME INCREASINGLY CEREMONIAL AS THE COUNTRY MOVES TOWARDS A PARLIAMENTARY GOVERNMENT.
AFTER SHE WENT TO EUROPE TO TRY AND PAVE THE WAY FOR GEORGIA'S EU BID, PRIME MINISTER IRAKLI GARIBASHVILI ACCUSED HER OF
VIOLATING THE CONSTITUTION, BANNED HER FROM TRAVELING TO EUROPE, AND TRIED BUT FAILED TO IMPEACH HER.
PRESIDENT ZOURABICHVILI HAS DEFIANTLY CONTINUED TO FLY TO EUROPE TO MEET WITH LEADERS ON HER OWN DIME.
>> IT DOESN'T SEEM LIKE THE PRIME MINISTER IS INTERESTED IN JOINING THE EU. >> WELL, THAT'S A QUESTION THAT
THE WHOLE POPULATION IS ASKING, WHETHER THEY REALLY WANT IT OR WHETHER IT'S LIP SERVICE. >> THIS IS A CRITICAL TIME.
DO YOU FEEL LIKE THE WEST, PARTICULARLY THE U.S., HAS BEEN RESPONSIVE ENOUGH AND SUPPORTIVE ENOUGH OF GEORGIA IN THIS
MOMENT? >> I DON'T THINK SO. AND I WILL TAKE ONE CONCRETE EXAMPLE.
I'VE BEEN A PRESIDENT NOW FOR FIVE YEARS, AND I'VE NOT MANAGED TO HAVE ANY FORM OF MEETING AT MY LEVEL, WHICH WOULD BE THE
PRESIDENT OR THE VICE PRESIDENT, EVEN THROUGH A PHONE CALL. I UNDERSTAND THAT THERE ARE MORE URGENT ISSUES, BUT I THINK THAT
SOME MORE PUBLIC RECOGNITION IS NEEDED. >> RECOGNITION OF? >> OF THE FACT THAT THE UNITED
STATES IS SUPPORTING OUR CANDIDATE STATUS WITHIN THE EUROPEAN UNION. I KNOW THAT THAT IS THE LANGUAGE
THAT THE U.S. HAS WITH OUR EUROPEAN PARTNERS, BUT THAT BEING REPEATED BY THE HIGHEST LEVEL WOULD BE MEANINGFUL FOR
THE GEORGIAN POPULATION. >> Reporter: THE EU HAS LAID OUT A LIST OF REQUIREMENTS FOR GEORGIA TO BECOME A FULL MEMBER.
THE CONDITIONS INCLUDE TACKLING CORRUPTION AND LESSENING THE ECONOMIC AND POLITICAL INFLUENCE OF DOMESTIC OLIGARCHS.
MEMBERSHIP IS NOT GUARANTEED. >> WHAT HAPPENS TO GEORGIA IF THE EU DENIES THE BID? >> IT WILL BE A BIG VICTORY FOR
RUSSIA. >> Reporter: A VICTORY VALYA VANISHVILI REFUSES TO GIVE THEM. 87 YEARS OLD, SHE SAYS SHE IS
HOLDING HER GROUND FOR HERSELF AND FOR GEORGIA. THAT BID MAY BE IN FURTHER JEOPARDY.
THIS PAST FEBRUARY, THE GEORGIAN PARLIAMENT APPOINTED A NEW PRIME MINISTER, AN AERNT WESTERN MINISTER OF THE RUSSIAN LEANING
GEORGIAN DREAM PARTY. IN MAY, HIS POST PASSED A FOREIGN AGENTS LAW WHICH THREATENS TO SILENCE MEDIA
OUTLETS AND NGOs INSIDE GEORGIA. IN JUST THIS PAST WEEK, HIS PARTY PROPOSED LEGISLATION THAT WOULD STRIP SAME-SEX COUPLES OF
THEIR RIGHTS. BOTH MOVES THE EU HAS SAID COULD SERIOUSLY COMPROMISE THE COUNTRY'S CHANCE FOR MEMBERSHIP
AND PULL GEORGIA DEEPER INTO RUSSIA'S ORBIT.
>>> I'M SCOTT PELLEY.