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CNN Live Today

FDA's Microscope; 'China Inc.'

Aired February 16, 2005 - 10:35   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RICK SANCHEZ, CNN ANCHOR: I feel like a pilot, running a little behind schedule because of all the hearings going on, but we're going to try and make up for time for you.
I'm Rick Sanchez.

DARYN KAGAN, CNN ANCHOR: And good morning once again. I'm Daryn Kagan.

Taking a loot at the screen, this is not "The Brady Bunch" with all the squares. Let's give you a rundown on who is on Capitol Hill and who they're talking to, starting with the top left. That is CIA director Porter Goss. He is before the Senate Intelligence Committee. To the right of your screen, on top, Defense Secretary Donald Rumsfeld before the House Armed Services Committee. Below him, Alan Greenspan. And over on the bottom left, Secretary of State Condoleezza Rice. Who they're talk to and exactly what they're talking about, we're going to get to in just a minute.

SANCHEZ: Meanwhile, some of the other big stories that we're following on this day, we're still waiting for some more information on that large explosion reported today in southern Iran. The cause of the blast is not known, but we're told that it may have been caused by a fuel tank falling off an airplane. Iran has a Russian-built nuclear plant in the region. Russian embassy officials have been telling Tehran and CNN that there is no explosion at that plant. We're going to stay on top of this for you.

Also President Bush left the White House just a few minutes ago for a campaign-style trip on Social Security reform. The president has a speech in New Hampshire next hour. This is the ninth state Mr. Bush has pushed his plan in since last month's State of the Union Address. The new poll says pore than half of New Hampshire adults oppose diverting part of payroll taxes to private investment accounts.

And the NHL player's union has a top of the hour deadline to accept a salary-cap offer from the league. If the offer is rejected, this NHL season will be canceled. Commissioner Gary Bettman has a 1:00 p.m. Eastern news conference scheduled for that announcement. The league made a $42.5 million final offer last night. The union responded with a $49 million figure.

One more story from the sports world. Lance Armstrong is going to be back to attempt a seventh straight win at the Tour De France. The news was posted today at his Discovery Channel team Web site. Last year Armstrong became the first cyclist to win the Tour De France a total of six times. KAGAN: If you have arthritis, you'll want to listen in. In Washington the Food and Drug Administration focusing today its microscope on popular painkillers for arthritis patients. The FDA is opening two hearings today on the safety of those medications, both prescription and over-the-counter, that have been linked to possible heart problems.

Our medical correspondent Christy Feig has the story.

(BEGIN VIDEOTAPE)

CHRISTY FEIG, CNN CORRESPONDENT (voice-over): Arthritis pain sidelined Fred Perini's active life, until Vioxx.

FRED PERINI, ARTHRITIS PATIENT: When I took that, it seems to relieve the pain.

FEIG: But Robert Glover says he thinks the same medicine killed his mother.

UNIDENTIFIED MALE: We had an ambulance show up. They took her to emergency, and she passed away of a heart attack.

FEIG: Vioxx's maker, Merck, pulled the drug off the market in September, citing red flags raised during long-term clinical trials.

RAYMOND GILMARTIN, MERCK & CO.: In the first 18 months of the study, there was no difference in the risk for heart attack or stroke in patients either taking Vioxx or a placebo. Beginning after 18 months, however, the risk of a cardiovascular event did increase among those on Vioxx.

FEIG: The Food and Drug Administration estimates that Vioxx may have contributed to more than 27,000 heart attacks and sudden cardiac deaths between 1999 and 2003.

In December, a study showed another drug in the same class, Celebrex, might also increase the risk of heart problems.

Critics say the government has not been aggressive enough in monitoring the safety of these drugs. Now an advisory committee to the FDA will review the studies and give their recommendations about what they think should be done with the painkillers.

Christy Feig, CNN, Washington.

(END VIDEOTAPE)

SANCHEZ: Taking a look at some other stories making news from coast to coast.

KAGAN: In Alabama, the state's official whiskey, it is gone off the shelf.

SANCHEZ: Gone?

KAGAN: Yes, I know it bums you out.

State officials have revoked Conoco Ridge's liquor license. The company founder pleaded guilty to three misdemeanors, including selling to an 18-year-old girl. The legislature is considering whether to rescind the brand's title as the official state spirit. Salacious.

SANCHEZ: There you go, near Grand Junction, Colorado, the icy mountain road went right, and the van went left and tumbled 400 feet down a mountain side. Look at that picture. The amazing part, the six people inside, not one had to spend even a single night in the hospital.

KAGAN: A different kind of ending here. Maybe next Valentine's, maybe you'll just think about roses and chocolates, better idea. A newly engaged couple in Tampa found that a balloon ride may not be the best way to celebrate. High winds turned their landing into a bumpy one before they splashed down in a nearby lake. Everyone is fine.

SANCHEZ: Love is in the water, as opposed to in the air.

In Kansas a puzzling picture of who done it with many pieces still missing. We know that BTK stands for Bind, Torture and Kill. We've told you that before. But after 30 years, the serial killer's identity is still a mystery. David Mattingly recently went to Wichita, Kansas, to look into this case.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Today's message is eerily similar to a postcard KAKE received last week.

LARRY HATTEBERG, KAKE ANCHOR: The theory is that this guy has probably been living amongst us for the past 30 years, going to the store with us, going to the movies. And that's the scary part.

UNIDENTIFIED MALE: We could make BTK into something more in terms of that, but right now all we have got with him is just the one story.

MATTINGLY (voice-over): After apparently vanishing 18 years ago, the Wichita serial killer known as BTK reemerged last March with a flurry of mysterious packages and cryptic notes, three of them delivered to television station KAKE.

HATTEBERG: Then you can say the BTK thing...

UNIDENTIFIED FEMALE: Yes.

HATTEBERG: ... coming up tonight.

MATTINGLY: And today, it is clearly the story that drives the news.

HATTEBERG: Well, that search for BTK continues today. BTK is the master puppeteer. He controls the police department. He controls the media and he controls the public. And he's the guy pulling the strings.

MATTINGLY: News anchor Larry Hatteberg was a young photographer at the scene of the first BTK murders in 1974 and he has covered every BTK murder ever since.

HATTEBERG: It was a terrible, terrible murder. And I remember thinking -- and we talked about it on television and of course it was discussed in the newspaper -- that things -- murders like this don't happen in Wichita, Kansas.

MATTINGLY: But this time, it's different. There's a new generation of viewers instantly fearful of what this killer might do, though, strangely, there are so far no new victims. The frequency of recent notes, however, suggests BTK has not lost his apparent need for attention, a trait that dates back to his first letter to this station in 1978.

HATTEBERG: He wrote to us and he said -- quote -- "How many more people do I have to kill before I get my name in the paper?" This is not a guy you want to tick off. This is not a guy you want to make mad. This is a guy you want to keep happy. So, if this constant publicity keeps him happy, so be it.

MATTINGLY: So, on February 3, Hatteberg had the idea to start a conversation, address the murderer directly in a newscast, in hopes of keeping the communication going. After 31 years of reading the words of a killer, Hatteberg was talking back.

HATTEBERG: We know he is watching and we know he is listening. And to him, we say, the message has been received and passed on.

As long as he's talking, as long as he's writing, as long as he's communicating, he's not killing. And that's the thing that we don't want to have happen is to him -- is for him to kill again.

MATTINGLY: There were similar attempts to open a dialogue 31 years ago. At one time, Wichita Police even asked KAKE to air subliminal messages. Flash frames telling the killer to call the chief didn't work and so far the killer has not responded to Hatteberg.

MATTINGLY: Do you think he was watching?

HATTEBERG: I think he was probably watching. I think he watches us every night and I'm pretty sure he was watching tonight because he watches for the publicity and he got a lot of publicity with this story tonight.

MATTINGLY: What would you do if you walked back into this news room and found that he was waiting for you at the other end of the telephone?

HATTEBERG: I would talk to him and then call 911, in that order. MATTINGLY: But if the day soon comes as some suggest that BTK decides to reveal himself, Hatteberg is ready with the question on everyone's mind.

HATTEBERG: I want him to be sitting right where you are and I want to look into his eyes and I want to say, why? What made you do this? What was inside your soul that caused you to do what you did? What kind of demons are in there? I want to talk to him. All of us want to talk to this guy.

MATTINGLY: It remains to be seen however if anyone will get that chance. Whether BTK is through terrorizing the city he has kept on edge for 31 years or he's just ending the chapter to a long and brutal story.

David Mattingly, CNN, Wichita, Kansas.

(END VIDEOTAPE)

KAGAN: Has a lot of people in Wichita scared for a long time.

SANCHEZ: Expectedly. I mean, understandably, I should say.

You thinking about buying? The housing market is showing no sign of slowing down.

KAGAN: And Wall Street is listening into what fed chairman Alan Greenspan has to say. He's saying it right now about the economy. We're going to have a check of today's business news, also tell you what Mr. Alan Greenspan has to say.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

KAGAN: And I think we'll take a break.

SANCHEZ: Yes, but we're going to have a lot more news when we come back, so stay there.

(COMMERCIAL BREAK)

KAGAN: So what do you give the man who has everything, including nuclear weapons? How about a state-sponsored birthday party? North Korean leader Kim Jong-Il celebrated his 63rd birthday with the full pomp and ceremony. International leaders are not as joyous. Many have voiced concerns about his nuclear boasts and are trying to coax North Korea back into disarmament talks.

SANCHEZ: Well, China has reportedly said that it will send a senior official to North Korea this weekend to try and resolve the crisis. It's a promise that they're making to the United States.

One person certainly familiar with the issues is journalist Ted Fishman. He has a new book, it's called "China Incorporated." Great read, details China's rise as the next industrial superpower. And he's joining me from live San Francisco to talk about China in general. But let's go ahead and begin with North Korea.

How much pool, how much sway will the Chinese have if they're able to corner the North Koreans and say, look, you've got to come back and talk to the rest of us?

TED FISHMAN, AUTHOR, "CHINA INC.": I think their power can be enormous. You know, China has a big military. Lots of Koreans are fleeing into China now, so China has a refugee problem, and they are motivated to get the Koreans to find a solution here.

SANCHEZ: Go ahead, finish your point. I'm sorry.

FISHMAN: No, I was going to say that we may find that this is the curtain opener for China's introduction to the world as a real geopolitical power.

SANCHEZ: I was just going to say, that's interesting you made that point. It does not seem to me there they're as interested in being a major political power as they are a major economic power, and that's what you really bring out in the book, just how far they have come while the rest of the world, including the United States, seems to be, what, sleeping?

FISHMAN: Yes, well, Rick, it's interesting, because if you look around the world now which is the country that has done best with the status quo? And it's China. Over the last 20 years, their standard of living has gone up four times, and they're doing very well when the world is the most stable.

And so here you have the power in the world, which was the most radicalized in the 20th century, and now they seem like a big stabilizing force in the world, and we're turning to them to be the stabilizing force, whereas our allies look at us and they wonder, is the United States still a stabilizing force? And now we;re the country seen as willing to upset the apple cart.

SANCHEZ: Let's try and give viewers a sense of just concretely how powerful economically China has become. You make a point. You say more than 70 percent of the commodities sold in a Wal-Mart store in the United States come from China. Think about that for a minute. That means Americans, every time they walk into a Wal-Mart are actually shopping from the Chinese.

FISHMAN: Yes, and there's a Chinese component in virtually every aisle you walk there in Wal-Mart, and Wal-Mart is the conduit for all of the output of the Chinese economy directly into Americans lives. It's more than 1 percent of the Chinese economy, through Wal-Mart.

SANCHEZ: So if they're that good and progressed so much, what are they doing right, if you look at it as a business model -- forget morality and everything else, which I think is important, and a lot of other people do, too -- what are they doing right and maybe we're doing wrong?

FISHMAN: Well, one thing they are doing right, which has nothing to do with our game plan at all, is they're unleashing the genius of their people. China has seen 120 million new businesses started in the last 20 years. Right now the count is 85 million private businesses in a country in which the government owned everything a very short time ago, and -- yes, go ahead.

SANCHEZ: I'm just thinking that people, they're great because they are providing us with wonderful consumer products that we're getting really cheap. They're bad, because they're hurting us because they're taking away jobs that Americans in the past would have had to create those products. Make sense?

FISHMAN: Yes, you put your finger right on the China bind. We wear two hats when we deal with China. China delivers us a fantastic boost in our standard of living. One of the calculations in the book describes how the Chinese economy has forced down prices of manufacturing goods around the world so much that for every American, there's a $550 savings that comes from Chinese manufacturing or the impact Chinese manufacturing has on companies that compete with them around the world.

SANCHEZ: And I would be remiss if I did not say this -- because we are running out of time -- and you're point is a good one, but I come from a communist country, and it's important to note that china does a lot of things that are not good. Yes, they've done very well, but they've done it at the cost of the rights of their own people, correct, and this is something we've got to kind of keep a check on?

FISHMAN: No, I agree. I agree. And a lot of the wealth in China right now comes at the cost of hundreds of millions of people who pay all kinds of stealthy taxes for that development, and that's something we should keep in mind. All the Chinese people deserve a life of dignity, but their economic growth often comes at the expense of dignity of many of them.

SANCHEZ: Eye-opening conversation, great book. It's called "China Inc." Ted Fishman is the author. He's good enough to spend some time with us, and we certainly appreciate it.

We have a lot more news, and we're coming right back.

(COMMERCIAL BREAK)

KAGAN: Getting that second term not only liberating for the president, but the first lady is shuffling the staff in the East Wing as well. We'll hear how she is revealing more about herself.

SANCHEZ: And if you see "The Simple Life" as more than just a reality show, well, you may be on to something. We will see a new list of the best places to just get out of the city, go live out in the country.

The second hour of CNN LIVE TODAY begins right after a quick break.

(COMMERCIAL BREAK)

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Aired February 16, 2005 - 10:35   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: I feel like a pilot, running a little behind schedule because of all the hearings going on, but we're going to try and make up for time for you.
I'm Rick Sanchez.

DARYN KAGAN, CNN ANCHOR: And good morning once again. I'm Daryn Kagan.

Taking a loot at the screen, this is not "The Brady Bunch" with all the squares. Let's give you a rundown on who is on Capitol Hill and who they're talking to, starting with the top left. That is CIA director Porter Goss. He is before the Senate Intelligence Committee. To the right of your screen, on top, Defense Secretary Donald Rumsfeld before the House Armed Services Committee. Below him, Alan Greenspan. And over on the bottom left, Secretary of State Condoleezza Rice. Who they're talk to and exactly what they're talking about, we're going to get to in just a minute.

SANCHEZ: Meanwhile, some of the other big stories that we're following on this day, we're still waiting for some more information on that large explosion reported today in southern Iran. The cause of the blast is not known, but we're told that it may have been caused by a fuel tank falling off an airplane. Iran has a Russian-built nuclear plant in the region. Russian embassy officials have been telling Tehran and CNN that there is no explosion at that plant. We're going to stay on top of this for you.

Also President Bush left the White House just a few minutes ago for a campaign-style trip on Social Security reform. The president has a speech in New Hampshire next hour. This is the ninth state Mr. Bush has pushed his plan in since last month's State of the Union Address. The new poll says pore than half of New Hampshire adults oppose diverting part of payroll taxes to private investment accounts.

And the NHL player's union has a top of the hour deadline to accept a salary-cap offer from the league. If the offer is rejected, this NHL season will be canceled. Commissioner Gary Bettman has a 1:00 p.m. Eastern news conference scheduled for that announcement. The league made a $42.5 million final offer last night. The union responded with a $49 million figure.

One more story from the sports world. Lance Armstrong is going to be back to attempt a seventh straight win at the Tour De France. The news was posted today at his Discovery Channel team Web site. Last year Armstrong became the first cyclist to win the Tour De France a total of six times. KAGAN: If you have arthritis, you'll want to listen in. In Washington the Food and Drug Administration focusing today its microscope on popular painkillers for arthritis patients. The FDA is opening two hearings today on the safety of those medications, both prescription and over-the-counter, that have been linked to possible heart problems.

Our medical correspondent Christy Feig has the story.

(BEGIN VIDEOTAPE)

CHRISTY FEIG, CNN CORRESPONDENT (voice-over): Arthritis pain sidelined Fred Perini's active life, until Vioxx.

FRED PERINI, ARTHRITIS PATIENT: When I took that, it seems to relieve the pain.

FEIG: But Robert Glover says he thinks the same medicine killed his mother.

UNIDENTIFIED MALE: We had an ambulance show up. They took her to emergency, and she passed away of a heart attack.

FEIG: Vioxx's maker, Merck, pulled the drug off the market in September, citing red flags raised during long-term clinical trials.

RAYMOND GILMARTIN, MERCK & CO.: In the first 18 months of the study, there was no difference in the risk for heart attack or stroke in patients either taking Vioxx or a placebo. Beginning after 18 months, however, the risk of a cardiovascular event did increase among those on Vioxx.

FEIG: The Food and Drug Administration estimates that Vioxx may have contributed to more than 27,000 heart attacks and sudden cardiac deaths between 1999 and 2003.

In December, a study showed another drug in the same class, Celebrex, might also increase the risk of heart problems.

Critics say the government has not been aggressive enough in monitoring the safety of these drugs. Now an advisory committee to the FDA will review the studies and give their recommendations about what they think should be done with the painkillers.

Christy Feig, CNN, Washington.

(END VIDEOTAPE)

SANCHEZ: Taking a look at some other stories making news from coast to coast.

KAGAN: In Alabama, the state's official whiskey, it is gone off the shelf.

SANCHEZ: Gone?

KAGAN: Yes, I know it bums you out.

State officials have revoked Conoco Ridge's liquor license. The company founder pleaded guilty to three misdemeanors, including selling to an 18-year-old girl. The legislature is considering whether to rescind the brand's title as the official state spirit. Salacious.

SANCHEZ: There you go, near Grand Junction, Colorado, the icy mountain road went right, and the van went left and tumbled 400 feet down a mountain side. Look at that picture. The amazing part, the six people inside, not one had to spend even a single night in the hospital.

KAGAN: A different kind of ending here. Maybe next Valentine's, maybe you'll just think about roses and chocolates, better idea. A newly engaged couple in Tampa found that a balloon ride may not be the best way to celebrate. High winds turned their landing into a bumpy one before they splashed down in a nearby lake. Everyone is fine.

SANCHEZ: Love is in the water, as opposed to in the air.

In Kansas a puzzling picture of who done it with many pieces still missing. We know that BTK stands for Bind, Torture and Kill. We've told you that before. But after 30 years, the serial killer's identity is still a mystery. David Mattingly recently went to Wichita, Kansas, to look into this case.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Today's message is eerily similar to a postcard KAKE received last week.

LARRY HATTEBERG, KAKE ANCHOR: The theory is that this guy has probably been living amongst us for the past 30 years, going to the store with us, going to the movies. And that's the scary part.

UNIDENTIFIED MALE: We could make BTK into something more in terms of that, but right now all we have got with him is just the one story.

MATTINGLY (voice-over): After apparently vanishing 18 years ago, the Wichita serial killer known as BTK reemerged last March with a flurry of mysterious packages and cryptic notes, three of them delivered to television station KAKE.

HATTEBERG: Then you can say the BTK thing...

UNIDENTIFIED FEMALE: Yes.

HATTEBERG: ... coming up tonight.

MATTINGLY: And today, it is clearly the story that drives the news.

HATTEBERG: Well, that search for BTK continues today. BTK is the master puppeteer. He controls the police department. He controls the media and he controls the public. And he's the guy pulling the strings.

MATTINGLY: News anchor Larry Hatteberg was a young photographer at the scene of the first BTK murders in 1974 and he has covered every BTK murder ever since.

HATTEBERG: It was a terrible, terrible murder. And I remember thinking -- and we talked about it on television and of course it was discussed in the newspaper -- that things -- murders like this don't happen in Wichita, Kansas.

MATTINGLY: But this time, it's different. There's a new generation of viewers instantly fearful of what this killer might do, though, strangely, there are so far no new victims. The frequency of recent notes, however, suggests BTK has not lost his apparent need for attention, a trait that dates back to his first letter to this station in 1978.

HATTEBERG: He wrote to us and he said -- quote -- "How many more people do I have to kill before I get my name in the paper?" This is not a guy you want to tick off. This is not a guy you want to make mad. This is a guy you want to keep happy. So, if this constant publicity keeps him happy, so be it.

MATTINGLY: So, on February 3, Hatteberg had the idea to start a conversation, address the murderer directly in a newscast, in hopes of keeping the communication going. After 31 years of reading the words of a killer, Hatteberg was talking back.

HATTEBERG: We know he is watching and we know he is listening. And to him, we say, the message has been received and passed on.

As long as he's talking, as long as he's writing, as long as he's communicating, he's not killing. And that's the thing that we don't want to have happen is to him -- is for him to kill again.

MATTINGLY: There were similar attempts to open a dialogue 31 years ago. At one time, Wichita Police even asked KAKE to air subliminal messages. Flash frames telling the killer to call the chief didn't work and so far the killer has not responded to Hatteberg.

MATTINGLY: Do you think he was watching?

HATTEBERG: I think he was probably watching. I think he watches us every night and I'm pretty sure he was watching tonight because he watches for the publicity and he got a lot of publicity with this story tonight.

MATTINGLY: What would you do if you walked back into this news room and found that he was waiting for you at the other end of the telephone?

HATTEBERG: I would talk to him and then call 911, in that order. MATTINGLY: But if the day soon comes as some suggest that BTK decides to reveal himself, Hatteberg is ready with the question on everyone's mind.

HATTEBERG: I want him to be sitting right where you are and I want to look into his eyes and I want to say, why? What made you do this? What was inside your soul that caused you to do what you did? What kind of demons are in there? I want to talk to him. All of us want to talk to this guy.

MATTINGLY: It remains to be seen however if anyone will get that chance. Whether BTK is through terrorizing the city he has kept on edge for 31 years or he's just ending the chapter to a long and brutal story.

David Mattingly, CNN, Wichita, Kansas.

(END VIDEOTAPE)

KAGAN: Has a lot of people in Wichita scared for a long time.

SANCHEZ: Expectedly. I mean, understandably, I should say.

You thinking about buying? The housing market is showing no sign of slowing down.

KAGAN: And Wall Street is listening into what fed chairman Alan Greenspan has to say. He's saying it right now about the economy. We're going to have a check of today's business news, also tell you what Mr. Alan Greenspan has to say.

(COMMERCIAL BREAK)

(STOCK MARKET REPORT)

KAGAN: And I think we'll take a break.

SANCHEZ: Yes, but we're going to have a lot more news when we come back, so stay there.

(COMMERCIAL BREAK)

KAGAN: So what do you give the man who has everything, including nuclear weapons? How about a state-sponsored birthday party? North Korean leader Kim Jong-Il celebrated his 63rd birthday with the full pomp and ceremony. International leaders are not as joyous. Many have voiced concerns about his nuclear boasts and are trying to coax North Korea back into disarmament talks.

SANCHEZ: Well, China has reportedly said that it will send a senior official to North Korea this weekend to try and resolve the crisis. It's a promise that they're making to the United States.

One person certainly familiar with the issues is journalist Ted Fishman. He has a new book, it's called "China Incorporated." Great read, details China's rise as the next industrial superpower. And he's joining me from live San Francisco to talk about China in general. But let's go ahead and begin with North Korea.

How much pool, how much sway will the Chinese have if they're able to corner the North Koreans and say, look, you've got to come back and talk to the rest of us?

TED FISHMAN, AUTHOR, "CHINA INC.": I think their power can be enormous. You know, China has a big military. Lots of Koreans are fleeing into China now, so China has a refugee problem, and they are motivated to get the Koreans to find a solution here.

SANCHEZ: Go ahead, finish your point. I'm sorry.

FISHMAN: No, I was going to say that we may find that this is the curtain opener for China's introduction to the world as a real geopolitical power.

SANCHEZ: I was just going to say, that's interesting you made that point. It does not seem to me there they're as interested in being a major political power as they are a major economic power, and that's what you really bring out in the book, just how far they have come while the rest of the world, including the United States, seems to be, what, sleeping?

FISHMAN: Yes, well, Rick, it's interesting, because if you look around the world now which is the country that has done best with the status quo? And it's China. Over the last 20 years, their standard of living has gone up four times, and they're doing very well when the world is the most stable.

And so here you have the power in the world, which was the most radicalized in the 20th century, and now they seem like a big stabilizing force in the world, and we're turning to them to be the stabilizing force, whereas our allies look at us and they wonder, is the United States still a stabilizing force? And now we;re the country seen as willing to upset the apple cart.

SANCHEZ: Let's try and give viewers a sense of just concretely how powerful economically China has become. You make a point. You say more than 70 percent of the commodities sold in a Wal-Mart store in the United States come from China. Think about that for a minute. That means Americans, every time they walk into a Wal-Mart are actually shopping from the Chinese.

FISHMAN: Yes, and there's a Chinese component in virtually every aisle you walk there in Wal-Mart, and Wal-Mart is the conduit for all of the output of the Chinese economy directly into Americans lives. It's more than 1 percent of the Chinese economy, through Wal-Mart.

SANCHEZ: So if they're that good and progressed so much, what are they doing right, if you look at it as a business model -- forget morality and everything else, which I think is important, and a lot of other people do, too -- what are they doing right and maybe we're doing wrong?

FISHMAN: Well, one thing they are doing right, which has nothing to do with our game plan at all, is they're unleashing the genius of their people. China has seen 120 million new businesses started in the last 20 years. Right now the count is 85 million private businesses in a country in which the government owned everything a very short time ago, and -- yes, go ahead.

SANCHEZ: I'm just thinking that people, they're great because they are providing us with wonderful consumer products that we're getting really cheap. They're bad, because they're hurting us because they're taking away jobs that Americans in the past would have had to create those products. Make sense?

FISHMAN: Yes, you put your finger right on the China bind. We wear two hats when we deal with China. China delivers us a fantastic boost in our standard of living. One of the calculations in the book describes how the Chinese economy has forced down prices of manufacturing goods around the world so much that for every American, there's a $550 savings that comes from Chinese manufacturing or the impact Chinese manufacturing has on companies that compete with them around the world.

SANCHEZ: And I would be remiss if I did not say this -- because we are running out of time -- and you're point is a good one, but I come from a communist country, and it's important to note that china does a lot of things that are not good. Yes, they've done very well, but they've done it at the cost of the rights of their own people, correct, and this is something we've got to kind of keep a check on?

FISHMAN: No, I agree. I agree. And a lot of the wealth in China right now comes at the cost of hundreds of millions of people who pay all kinds of stealthy taxes for that development, and that's something we should keep in mind. All the Chinese people deserve a life of dignity, but their economic growth often comes at the expense of dignity of many of them.

SANCHEZ: Eye-opening conversation, great book. It's called "China Inc." Ted Fishman is the author. He's good enough to spend some time with us, and we certainly appreciate it.

We have a lot more news, and we're coming right back.

(COMMERCIAL BREAK)

KAGAN: Getting that second term not only liberating for the president, but the first lady is shuffling the staff in the East Wing as well. We'll hear how she is revealing more about herself.

SANCHEZ: And if you see "The Simple Life" as more than just a reality show, well, you may be on to something. We will see a new list of the best places to just get out of the city, go live out in the country.

The second hour of CNN LIVE TODAY begins right after a quick break.

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