Waking the Dragon

Sept. 20, 2005 — -- China's economy continues to skyrocket and, with it, American fortunes have been won and lost. "Good Morning America's" Bill Weir recently traveled to China and returned with a four-part series: "Made in China: Your Job, Your Future, Your Fortune."

In the first installment, Weir examines China's transformation from a developing country to a developing superpower and why Americans should take notice.

Waking the Dragon

About 200 years ago, Napoleon returned from China and said, "That is a sleeping dragon. Let him sleep! If he wakes, he will shake the world."

China seemed asleep in the 19th and early 20th centuries, when the country was ravaged by civil unrest, famines, military defeats and foreign occupation before the end of WWII when the Communists established a socialist system with strict controls over everyday life.

In 2005, the dragon is wide awake, and restless.

Meet Gwei-Ching. At first glance, he appears to represent the traditional image of China. He is a cabbage farmer living in a tiny house without plumbing, and supports his family on $20 a week.

But in the middle of a conversation with a vising reporter, Gwei-Ching's cell phone rings. It is a sharp reminder that this once-agricultural society is rapidly transforming into a new China.

"[M]ore people in China have cell phones than there are people in America," explains Tom Friedman, a columnist for The New York Times who has written several books on the developing world.

In the United States, there are nine urban centers with more than a million people, China has 174; Chinese will soon pass English as the most commonly used language on the Internet. With a population of 1.3 billion, Chinese outnumber Americans four to one, and their economy has the potential to rush past America's as well.

Race to the Top

China is thinking big.

"China's not racing us to the bottom," says Friedman. "They're racing us to the top. They don't want to work for General Motors. They want to be General Motors."

Over the past 25 years, 400 million Chinese have risen out of $1 a day poverty. The average citizen's income has quadrupled, and with advancements in technology, many believe it is only a matter of time before this "developing country" develops into a rival superpower.

At the Microsoft lab in Beijing, employees are not just assembling, but also inventing software. A few miles away, at the Genomics Lab, Chinese researchers are mapping the human genome.

"In science, there is no No. 2, only No. 1," said Darren Cai of Genomics. "We use 24 hours, 7 days, compared to other people's 5 days, 8 hours, and that's how we can squeeze more out and getting a cost advantage here in China."

To understand the warp speed at which this lab is operating, consider this. When the SARS virus recently hit Asia, Genomics was able to isolate the genetic makeup of the virus in a day and a half.

"The next great breakthrough in bioscience could some from a 15-year-old in Guangzho who downloads the human genome from Google wirelessly while walking down the street," Friedman said.

Fading Red

The economic growth defies those of other communist countries.

"You can find a lot of things in China these days," said Richard Haass, president of the Council on Foreign Relations. "The one thing that's really hard to find is a communist."

But certain aspects of communism remain, even if as restrictions loosen; a free market does not mean freedom of religion, speech or assembly.

At Tiananmen Square, 16 years after a deadly confrontation between police and peaceful pro-democracy demonstrators, police could not believe ABC News received permission to film in the square and became angry when approached by reporters.

"After the Tiananmen massacre, the Chinese leadership said to its people, 'OK, here's the deal folks. You can do whatever you want. You can start whatever business you want. You can say in private whatever you want. Just let us rule," Friedman said.

Hip Hop in Shanghai

As the economic picture in China transforms, so does the cultural landscape.

An old military factory that used to turn out uniforms, is now producing the Chinese edition of Seventeen magazine for a generation that relates to American values.

"They believe in self-expression," said Huang Hung, chief executive officer of China Interactive Media group. "They believe in individuality. They believe in pursuit of happiness for themselves."

At a trendy nightclub in Shanghai, the DJ who used to buy his favorite music on the black market growing up, now makes a living spinning hip hop above packed dance floors.

Slowly, the American Dream is becoming the Chinese Dream, but not everyone is comfortable with the transformation.

"We are dealing with a takeover attempt by the most powerful communist dictatorship in the world," James Woolsey, former director of the CIA, recently told Congress.

Haass says the relationship is more complicated.

"You can't think just one thing about China," Haass said. "The U.S.-China relationship, more than any other in the world, will determine the character of the lives for you, me, our children and our children's children."

Tomorrow Bill Weir examines "Made in China: Your Job."