Ambitious plans to achieve Economic Dominance abroad and total surveillance at home. Whoever wins the tech wars, especially in Artificial Intelligence and big data, in the next five years, is going to control the world in the future. I traveled all across china with amazing access to see how Chinese Technology is already leapfrogging the u. S. China has become a rival superpower to the United States. And maybe even spying on us in places youd never expect. It creates a major vulnerability. Ill just leave it at that. Im richard engel. This is on assignment. Theres an old chinese saying, that just as theres not enough room in the sky for two suns, theres not enough room on earth for two emperors. Even as the two nations go head to head in a trade war, many people here seem convinced that the time has come for china to replace america as the great power in the world. To see what fuels that sense that chinas on the rise, im heading to one of its most dynamic new cities. Im on my way to shenzhen, which is chinas tech capital. To see the country im going to take the train. Its 1,000 miles from here. And i got to ride on chinas new highspeed rail network. Just over a decade ago, the Chinese Government launched an ambitious plan to crisscross the country with trains that cruise at more than 150 miles an hour. Nice train. The network quickly grew from two tiny highspeed lines to this. China now has as many miles of highspeed track as the rest of the world combined. Cutting travel times and connecting even the most remote parts of the country comfortably. One of my fellow travelers happened to be a lawyer named sandy jang. We want our country to be the number one. Number one country in the world . Of course. Leader of the world. Of course, why not . What happens to the u. S. . Number two. Number two . Why not . Ten hours after leaving beijing, we arrive in shenzhen. Like the train network, this city appeared from almost nowhere. 30 years ago, it was a fishing village. But then the communist government tried an experiment. Special Economic Zones. Nbc news reported on it back then. The special Economic Zones are a concession to capitalism. The chinese have bent the rules to attract a wide variety of foreign investment. And sure enough, the money poured in. How are you . Richard. Welcome to shenzhen. Thank you very much. William balbeen was one of those american investors attracted by chinas economic opportunities, a long way from his native new jersey. My mothers chinese, my father you up in the states. I originally came out in the mid 90s to study chinese. Ive been in Mainland China for the last, what since 2002. How has it changed since youve been here, the last 14, 15 years . Its a world of difference. You think about china speed. So one month here is like six months or a year anywhere else. Things move extremely quickly. Heres lunch. Great. These look great. If Silicon Valley is the Global Software capital, shenzhen is tkingdom of hardwar, where 90 of the worlds Consumer Electronics are made. But the way this city developed its hardware expertise is to say the least controversial. In market stalls all across the city, people unpack, take apart, and analyze the latest innovations from western companies. Then figure out how to copy them. The chinese have a word for it. Shenzai. Rough translation, tinkering. The u. S. National Security Agency has another word for it. Theft. A lot of americans say china got this way by ripping off the United States, by ripping off technology, copying it. Exactly. When you start off, you beg, borrow, and steal from whoever you can. People have been doing it here now for the last 20 years. The big difference now is youre actually seeing innovation here for the first time. This way . Yeah. And thats the big leap. Moving from imitation to creation. Thats whats happening now. And because theyve been copying things here for so long, theyve gotten really fast. To the point where you can have a new product in the market within a week before other people in other countries are just getting done drawing out their plans. Its very difficult for anywhere and any other place in the world to compete. Were in here. Were in here . This is it, this is us. Welcome to hacks. We help Startup Companies come to shenzhen. Weve got products here are all these your companies . These are companies weve invested in from around the world. About onethird from the u. S. We bring them to shenzhen to take their product from prototype into market. How Many Companies . We were the first hardware accelerator in the world. Almost 250 companies have gone through this exam. He calls his incubator hacks. It opened doors in 2011 giving startups a helping hand. Entrepreneurs come here to work on everything from windowcleaning robots to machines that will help your pingpong game. Hacks gives them office space, workshops, and business expertise, all for a piece of the company if it makes it big. We bring engineering talent that they might be missing, we bring capital, we introduce investors. By the way, this used to be called the American Dream. Yes. Where you would go and you would start a company. Yep. Bring it to market. Yeah. Thats called the American Dream. And the American Dream now requires people to be not just in america, but need to its global from year one. We started out in San Francisco, actually. Then we realized that we accomplished less in one year in San Francisco than we did three months in shenzhen. Jason gui and his team are hoping to become another hacks success story. I found it telling that most of the people here were educated at top schools in the u. S. Now these Three Friends are hoping their company, view, which makes smartglasses, will be the next big thing. Can i try them . Yeah, for sure. So these are the speakers back here . Yeah, exactly, yes. You put those on. Put the microphone here. Tap on the side. Any particular way . Thats bone conduction. Youre listening to music through your bones. But what might give this startup its real edge is whats downstairs. This is the ultimate Shopping Mall for geeks. Exactly. Yeah. And so you can pretty much find anything you want, from a tiny component like a battery or resister, up to a fullscale working product. Hacks sits on top of an aladdins cave for tech heads. If you want to build a phone or a coffeemaker or a new drone, all the parts are at your fingertips. No waiting time, no ordering delays. So entrepreneurs can build their prototypes faster and start production faster. Its a cando approach that helped build this city and is now fueling chinas entire economy. Its the most competitive market in the world. And that opens up a huge number of opportunities. The culture here among local startups is 9 00 a. M. To 9 00 p. M. Six days a week. Though occasionally even the hardestcharging tech pioneer needs a power nap. I think china is adrenaline plus chaos. You know, it never stops. At night, chinas hightech light displays are hard to miss. Beautiful and mesmerizmesmerizi. But they also send a message that after decades, chinas tinkerers now want to take the lead. Not just in china but in the world. When we come back the future of the world is china. Chinas hightech edge. Were just sort of hovering here. And the real reason its investing billions in other countries. I think for our geopolitical motivations, there are economic motivations, there may be military motivations. Hmm. Exactly. Liberty mutual customizes your Car Insurance, so you only pay for what you need. Nice. But, uh. Whats up with your. Partner . Not again. Limu thats your reflection. Only pay for what you need. Liberty, liberty, liberty, liberty if ywhen you brush or floss, you dont have to choose between healthy gums and strong teeth. Complete protection from parodontax has 8 designed benefits for healthy gums and strong teeth. Complete protection from parodontax. I get to select my room from the floor plan. When i book at hilton. Com free wifi. And the price match guarantee. So with hilton there is no catch. Yeah the only catch is im never leaving. No im serious, i live here now. Book at hilton. Com and get the hilton price match guarantee. If theres one thing most americans know about china, its this. The great wall. One of the most famous structures in the world, built to protect and contain an empire. Today the wall still draws the tourists. But china now is all about expanding its boundaries. Wall no more. First trip in a selfflying taxi. No meter. No taxi driver. Here we go. This is amazing. Were just sort of hovering here. Its still a prototype. But eventually this flying robot taxi will have a range of 25 miles, and theyre already being tested for use in china. That is a very cool ride. That is a very cool ride. Derek jung is the cofounder of the company that made it as the ultimate cue for gridlock. To go as fast as 120 kilometers per hour. 180 miles an hour . Right. And theres no traffic . No traffic at all. From Driverless Cars setting speed records to robot hotels. Everywhere you look, you get a sense of chinas rise. I think a lot of americans dont understand china. They still have an outdated vision that china is about poor people who are making cheap products. Sean rain grew up in New Hampshire but now runs a Successful Company in china advising businesses on how to access the countrys growing consumer class. When i first moved to china in the mid 90s, it was very difficult for chinese to get a job. They were desperate. They wanted to do anything, even work in factories making nike airs, working for 12, 14 hours a day for literally a dollar or two. But now you start to see chinese consumers dont want to make nike products anymore, they actually want to buy them. 30 years ago the majority of people here lived in poverty. Thats changing. Fast. The future of the world is china. Its an unstoppable force. Thats quite festive. It is. This is chinese new year. There is about a 350 million strong middle class. There are more minted billionaires in china in the last five years than anywhere else in the world. Chinas new wealth is on display everywhere. Modesty and parole la tair accurate egalitarianism were virtues under communism. Theyre distant memories now. When you look at this everyones out buying, spending, eating. Haagendazs and kfc. China is going to actually become the largest Retail Market in the world in 2019, replacing the United States as the biggest market for consumption. And for me the one thing you need to know about china today is that with its growing economic power comes a desire for political power. Power china once had and lost. This is the Summer Palace in beijing, a reminder of chinas golden era and what happened to it. The british burned the palace down in 1860, a humiliation that still stings. The palace was rebuilt in extraordinary detail. People come from all over china to admire it, but also to say that chinas days of being pushed around by outsiders are over. No one champions that message more than president xi jinping. Hes deeply, deeply ambitious. Evan maduro served in president Obamas White House as a china specialist where he got to meet, know, and understand president xi. He has a sense of urgency that he needs to change china to make it a great power as rapidly as possible. In chinas understanding of its history, its been a global power before. So he wants to reclaim a status that china had lost. President xi mixes chinese nationalism with statecontrolled capitalism. The combination allows him to roll out huge projects very quickly. And none is bigger or has more potential to change the world than the socalled belt and Road Initiative. Its a massive Infrastructure Project that spans multiple continents. You might call it a silk road for the 21st century. The United States clearly needs to keep an eye on the belt and road. I think there are geopolitical motivations, there are economic motivations, there may be military motivations. Thats an entirely legitimate concern out there. The plan is to build and interconnect a network of Infrastructure Projects in at least 70 countries. New roads, new bridges, new ports. The belt and Road Initiative aims to create a new Global Trade Network so that once again all roads will lead to beijing. And thats not all. Beijing isnt just building the new roads, its lending its partners in africa and asia the money to pay for them. They are racking up huge debt. And that translates into huge influence and leverage for china around the world. You really cant counter belt and road. America doesnt have the resources, and theres so many countries, well over 60 countries in the world, that are now members of belt and road simply because theyre interested in getting access to belt and road money to build infrastructure. And as with just about everything in china these days, hightech plays a big role as well. This is an artificial island. China built it a few years ago, connected to the mainland by a 20mile bridge, itself a marvel of engineering. The island is home to the busiest deepwater port in the world. But when you come here, theres something a little eerie about the place. Nobody home. Theres nobody here. One of the few humans around is the operations director, jack lu. These automatic cranes are dropping off containers of Driverless Cars. Yes. Those little blue trucks. Yes. The facility exports around 200 billion worth of goods every month. Virtually all of the work done by robot. Fully automatic. Its amazing. It is amazing. This is how big and how ambitious chinas plans are. This is the busiest port in the world. And they spent billions on automation. They dont do that, you dont spend all that money, you dont build one of the longest bridges in the world, unless you plan on being in business for the long haul. China wants to dominate it all. From robotic heavy machinery to consumer technology. Like this weird little gadget. What is this . This is actually one of our products, hover camera passport. Its been following me around. I know. Like your personal photographer. Its a flying selfie camera. Its inventor is this guy, hung cho wang, who everybody called m. Q. He says the difference in his drone isnt in what it does but how. Were pushing the frontier of embedded Artificial Intelligence. Artificial intelligence, a. I. For short, simply means machines that can learn for themselves. Were building drones that can think and act almost like a human. Until recently, even ra powerful computer could only do what you told it to do, what it was programmed to do. A. I. Changes that. These are machines that learn from experience. Im going to press start. And please this drone looks around and tries to find a face it knows. Thats face recognition . Yes. Okay, so now im going to release it. Then it follows it. If i move over here, it follows me. Yeah. Move over here and after that, without anyone telling it where to go how does date know how high to go . It flies itself. And follows its owner around like a pet. While much of the groundbreaking research for Artificial Intelligence was done in the u. S. And europe, when it comes to putting a. I. Into products, chinas way ahead. In the area of technology application, i think were actually leading the world. Lets take a selfie. Chinas beving very wells in a. I. Three, two, one, smile. So m. Q. Has got plenty to be smiling about. But Artificial Intelligence in china isnt just about taking selfies or making money. Some of it has another purpose. Watching your every move. After the break you have to use a system that is scraping, mining, refining your data. Why chinas big tech firms want to know all about you. You dont have the same privacy concerns in china like you do in the United States. I keep hearing that, i keep hearing that. What, Chinese People just dont value privacy . Flyby ballooning. man dont. Go. Down. Oh, no aaaaaaahhhhhhhh burke rooftop parking. burke and even a hit and drone. driver relax, its just a bug. Thats not a bug, thats not a bug burke and we covered it. Talk to farmers. We know a thing or two because weve seen a thing or two. We are farmers. Bumpadum, bumbumbumbum so chantix can help you quit slow turkey. Rkey. Along with support, chantix is proven to help you quit. With chantix you can keep smoking at first and ease into quitting. Chantix reduces the urge so when the day arrives, youll be more ready to kiss cigarettes goodbye. When you try to quit smoking, with or without chantix, you may have nicotine withdrawal symptoms. Stop chantix and get help right away if you have changes in behavior or thinking, aggression, hostility, depressed mood, suicidal thoughts or actions, seizures, new or worse heart or blood vessel problems, sleepwalking, or lifethreatening allergic and skin reactions. Decrease alcohol use. Use caution driving or operating machinery. Tell your doctor if youve had Mental Health problems. The most common side effect is nausea. Quit smoking slow turkey. Talk to your doctor about chantix. We probably all have friends who seem surgically attached to their smartphone. Maybe you feel that way about yourself. But here in china, just about everyone is. And theres really not much choice. If you dont have your phone, its almost impossible to live here right now. Business consultant shaun rein says the mobile phone has become essential for living in china. You cant buy anything, you cant go anywhere, you cant book anything. You really have to be using your mobile phone on a really minute by minutebasis. And that new technology is everywhere. So even here in the street market, you pay for your dumpling soup and your fried roll with your phone. You just scan the bar code, and youre done. Very easy. Everywhere. To show me how far china is going to embrace technology, shaun took me shopping. This is a Grocery Store owned by alibaba, one of the Largest Technology companies in the world. Alibaba is often referred to as chinas amazon, but its even bigger. Comparing amazon to alibaba is like comparing a ford to a ferrari. Even though its growth slowed a bit after president trumps trade tariffs, alibaba is still a commercial powerhouse. What started out as an ecommerce site is now onestop shopping with a payment system, alipay, instant messages. It even provides loans. 500 Million People use alibabas apps every month, making its founder, jack ma, chinas richest man. Mas latest addition to the alibaba universe is aimed directly at its datadriven customers. Lettuce, it has on qr code. You take your phone, you can scan. You can see when it was delivered to the store, you can see the temperature. Thats for every single item in here . That is a lot of work. Its really quite amazing. If you cant wait to get your food home and want to eat it in the store, technology is here to help. From picking out your food to choosing your sauce and of course it comes out served by robots. Oh, it opens up for you . This kind of reminds me a little bit of america circa 1950. Obviously this is much more advanced. But the concept of, were going to have fully automated restaurants, everything is going to be automatic. So theres a lot of similarities between china now and in the postworld war ii era in the United States. A lot of chinese feel that technology can solve any problem. But what looks to some like convenience also has a whole other purpose. Because the data flows both ways. Every time you brows or scan or buy, alibaba gathers a little more information about you. And not just your taste in book choi. One of the challenges in china is that some of the biggest tech firms are now also the payment gateways. If you want to buy something in china, you have to use a system that is scraping, mining, refining your data. Amy webb is a professor at nyu Tenderness School of business. Shes a futurist who uses statistical models to predict the next big thing. In china, she says, its data mining. On a scale unimaginable in the United States. Chinas pushing far ahead. And its able to because the laws are different. So there arent the same restrictions around privacy. That means chinese corporations have been able to use all those cell phone clicks not just to track peoples buying habits, but to access who they know, their health information, not to mention their precise location at any given time. Chinese are not bothered . Theres not the same privacy concerns as you have in the United States. I keep hearing that. Chinese people dont value privacy . My wife is chinese and she always dell yells at me im too individualistic, im too american, i always care about myself. In china they tend to look at the collective, the whole. Theyre willing to sacrifice some of their personal freedoms in order to make a better society. Of course u. S. Tech firms mine plenty of consumer data as well. But theres a big difference. Google, apple, and facebook generally dont share what they learn with the government. Tech entrepreneur william balbeen says in china theres no firewall between big tech and the ruling communist party. For the most part its actually the companies, the internet companies, the ledders. The end result is the same, give all that information to the government . Yeah, and its open to them. Meaning that the Chinese Government has ready access to two immensely powerful and complementary tools. First an unprecedented amount of personal data gathered continuously from a billion eager consumers. Second, it diddingedge Artificial Intelligence that can sort through all that data. What can an authoritarian government do with this powerful cocktail . Youre about to see for yourself. Stay with us as we take a closer look at chinas allseeing communist party. There are an estimated 200 million surveillance cameras in china. And now they not only know where you are, they know who you are. The technology being used to control chinas enormous population. But are these the most powerful surveillance cameras in the world . Yeah, these are certainly the highestresolution cameras in the world. How it works. Recognizing your face, recognizing your name. And why its got people worried. From the perspective of human rights and universal rights, deeply disturbing. That i won the best of i casweepstakes it. And i get to be in this geico commercial . Lets do the eyebrows first, just tease it a little. Slather it all over, dont hold back. Well, the squirrels followed me all the way out to california and theres a very strange badger staring at me. No, i cant believe how easy it was to save hundreds of dollars on my Car Insurance with geico. Uhhuh, wheres the camel . Mr. Big shots got his own trailer. Wheeeeeee believe it geico could save you 15 or more on Car Insurance. My bladder leak underwear. Orried someone might see so, i switched. To always discreet boutique. Its shapehugging threads smooth out the back. So it fits better than depend. And no one notices. Always discreet. Today, lifechanging technology from abbott is helping hunt them down at their source. Because the faster we can identify new viruses, the faster we can get to stopping them. The most personal technology, is technology with the power to change your life. Life. To the fullest. Im richard lui with your top stories. President trump stirring up new controversy with a tweet saying that a group of congresswomen of color should go back to their quote broken and crimeinfested places from which they came. This tweet provoked a wave of condemnation from the targets. Alexandria ocasiocortez saying, trump cannot conceive of an america that includes us. Barry has now weakened to a tropical depression, but forecasters warn of continuing dangerous flooding ahead. Now back to on assignment made in china. Ive been coming to china for years. And with each trip im astonished at how quickly its changing. Not long ago, they had no subways. Now you buy your ticket with your phone. The mobile internet is everything here. And its everywhere. Cheap smartphones and superfast internet speeds mean this is now a connected nation. But there is also a dark side to all this technology. While it makes it easy for people to navigate their way through chinas sprawling mega cities, this is also a country where no one is ever out of sight. There are an estimated 200 million surveillance cameras in china, and now they not only know where you are, they know who you are. In china, big data and Artificial Intelligence have come together, and their offspring isnt pretty. In fact, the union of technology and Data Collection can be terrifying. The Artificial Intelligence system behind chinas ubiquitous cameras are able to recognize different faces. And unlike traditional computers that get overwhelmed with huge amounts of data, a. I. Systems get better and smarter the more information you feed them. So the more faces the cameras in china see, the better the a. I. Systems get at distinguishing between them. The Chinese Communist party is using this technology to build the ultimate surveillance state. And there are plenty of people willing to help. Among them is an american named david brady, a professor at Duke University in North Carolina specializing in optics and High Resolution lenses. Simply put, are these the most powerful surveillance cameras, most detailed surveillance cameras in the world . Yes, yeah. These are certainly the highestresolution cam rath in the world. How many cameras . This has 19 what we call microcameras inside. What makes bradys cameras unique are they can record an area thats several miles wide in extraordinary detail. Just one camera can monitor a neighborhood, zooming in without losing resolution, and do it all from far enough away that youd never know you were being watched. As you zoom in, it switches to higherresolution cameras. Brady started his research with a grant from the u. S. Government. But brought his skills to shanghai in 2016. Name any camera company, go pro or any of the cell phone companies, cameras are manufactured in china. So we, you know, we had to come here to do the manufacturing. Its not that easy to create a Hardware Company in the United States. But this is also where david bradys customers are. He sells to the local Chinese Police force and government. Do you have any qualms about that . Giving china more tools to monitor its population . I dont, no. Theres cameras everywhere in the world. I certainly understand that there are things that are regrettable that every government does. But i dont think people stay up late at night worrying about what cameras are seeing. If they did, theyd have plenty to worry about. Keeping tabs on chinas population is now a multibilliondollar industry. Cameras tracking peoples every move around the clock. Futurist amy webb says in the most rapidly urbanizing society in the world, a. I. Has taken over from the village gossip. For many, many years one of the cultural traditions is that you have a lot of people keeping tabs on the neighbors. And those people would report up to the next tranche level of people, and they report up and they report up, and the sort of system of gossip, really, eventually makes its way to people who can enforce change. And that is nothing new. Whats so compelling, i think, about a. I. Is that a lot of these processes can be automated. And big brother isnt just watching anymore. Hes calling you out. The government and the local governments do track some things. For example, the traffic cameras. If you run a red light or you drive too fast, you drive drunk, they track you. Even just crossing the street, you are always on camera. And if you jaywalk, youll be caught, shamed, and fined. Now im probably going to be okay because as a foreigner im not in the system, for now. Its different for locals. If you do live here and the cameras catch you crossing the street without waiting for the light to change, the a. I. Backed systems read your face and figure out your name. Then they project your picture on giant screens for everyone to see. So you cross the street, jaywalk. You have to stop for a moment and think about the Technological Advancements that made that possible. If youre a citizen, recognizing your face, recognizing your name, displaying that information, and then by the way it typically goes out on a social network and your acquaintances are notified. But it also then becomes a bad reflection on the people that you know. So theres quite a bit of social peer pressure for everybody to conform. Remember, its not just your face in the system. Thanks to data mining, the government knows all about you. And thats when it gets really scary. Because the government is using all the information it has to rank people by their perceived reliability and loyalty. China is rolling out a program already in place in some cities to assign citizens with whats ominously called a social credit score. Its a grade based on your social media activity, any runins with police, your financial status, even who your friends are. And its shared with everyone from your bank manager to your boss. So if youre on the wrong side or even being perceived as on the wrong side of the communist party, these kind of internal security controls i think are profoundly disturbing. As a former white house adviser, evan maduro spent years studying the communist party. The Chinese Government is using Artificial Intelligence, and in particular the rapid and substantial and impressive advances theyve made in facial recognition, as a way to monitor people throughout china. The largestscale case is what china is doing with its ethnic Muslim Population known as uighurs. Chinese authorities have used facial recognition to more efficiently pick them out and have sent hundreds of thousands of them to reeducation camps, calling it a war on terror. Theyve used a. I. To create more of a police state in china. And its deeply disturbing from the perspective of human rights and universal rights. Theres a reason the communist government in china is going to such lengths to watch and control its people. It doesnt want a repeat of history. 30 years ago, prodemocracy protesters took to Tiananmen Square in beijing to demand change. The army rolled in the tanks. Killing an estimated 10,000 people. But ask many Young Chinese about it, and theyve never heard of it. Its been scrubbed from the internet here. Excised from the nations conscience. Today Tiananmen Square is closely monitored by surveillance cameras. We asked professor david brady about that. I personally dont think its my position to tell china in what ways it can use or not use cameras. If you name the top cities in china, most of them have our cameras installed. Tiananmen square . I certain personally have not been involved in discussions about use of the cameras in Tiananmen Square. I believe they have been tested for that application, but as far as im aware, theyre not being currently used in Tiananmen Square. Would that make you feel uncomfortable, considering the history of that place . To be honest, i would be i know the history, ive been to Tiananmen Square, i understand the security situation there. I would be proud if our cameras were used in Tiananmen Square. Really . I dont mean to sound obtuse, but really . I think that theres a feeling about the government of china in the United States that i dont think is completely fair. Whatever you think about chinas use of technology, futurist amy webb says its another sign of its growing strength. As critical as i am of what i see the Chinese Government doing, a part of me is also in awe of the longterm vision and making good on that longterm vision incrementally. In the United States we have no national Artificial Intelligence policy. We have effectively defunded basic research in science and technology. For gods sake, we are arguing in this country about creationism still. Is china trying to take advantage of our running in place, our political distractions, our i mean, i would. Some experts are now concerned that chinese hightech surveillance is reaching way beyond its own borders. Right into the heart of the United States. Coming up, is it Communications Equipment . Or spy gear . This is the heart of the system. Right. Every phone call thats made, every Internet Connection thats made, processes through one of these pieces of equipment. Play it cool and escape heartburn fast with new tums chewy bites cooling sensation. 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Mcdonalds is committing 150 Million Dollars in tuition assistance, education, and career advising programs. Prof Maria Ramirez mom and dad Maria Ramirez to help more employees achieve their dreams. It is 8 00 already, and its 38 degrees im on my way to one of the more remote parts of the United States. And probably the last place youd expect to find Chinese Technology. This is dixon country. We are a long way from shanghai. Hi, this is kimberly, how can i help you . Pine belt telecoms is not a tech giant by any stretch of the imagination. Set up after world war ii to connect rural customers not served by the big providers, its headquarters are in arlington, alabama, population 456. Doesnt get much more rural than this. Its pretty rural. Were in the sticks. Yeah, definitely so. These parts, if you want to find out about the phone business, john nets thes president of pine belt telecons is the man to talk to. How dependent are people here on their communication devices . As dependent as anybody anywhere is is. If not even more so. Its the connection to the world. Pine belt serves a community of 100,000 providing land lines, cell phones and internet. This is our main core. These things on the bottom here are doing the bulk of the work . Pretty much, yep. This is the heart of the system. Every phone call is made, every internet session thats made, processes through one of these pieces of equipment. Equipment made by a Chinese Company called zte. These are all zte systems. For this area, all your customer base, effectively everything they use, their phone, data, internet comes through this room. Thats correct. And thats a problem. Stocks falling sharply an trade tensions with china. An executive arrested in canada. Sa massive blow to zte. Zte and its rival washingthu enormous telecon firms. They make vital hardware that connects phone calls and provides access to the center. They worry huawei and z terks Communications Devices installed all over the world can be accessed remotely by the Chinese Government. In other words, the kind of data mining an ai spying we have seen in china could also be happening in rural alabama. The chinese have laws within their own country that require companies to respond to the governments call for data. Michael collins is a leading china analyst for the cia. The companies beholden to the communist party are beholden to the governments orders or requests. They are not requests. Right. President trump has signed an executive order declaring a National Emergency banning u. S. Companies from using chinese telecon equipment. While president trumps order didnt name any particular company, zte and huawei are widely understood to be the target. Huawei is something thats very dangerous. You look at what they have done from a security standpoint, from a mill tower standpoint, its very dangerous. The susquehanu. S. Is is so c about Communications Equipment being used for spying, it class tied china as foreign adversary. Zte didnt respond to our request for an interview, but huaweis Vice President did. He denies his company spy rs for china and says the u. S. Government is stoking fear. They are using this issue of security as one of the main baniers, if you like, to prevent huawei becoming a real success in america. Youre saying they are accusing huawei of being a piece of the Security State in china as an excuse to knock it off the market. Were a a private company. Were not negotiate associated Chinese Government. These Companies Want their International Reputation to be let nit jit mat. They dont want to be seen under the thumb of the communist party of china. Collins is still concerned. Mainly because of what zte and huawei plan to do next. Their ambition is to dominate 5g, the next generation of superfast mobile communications. It will be the backbone of the next global telecommunication network. The cia and other western Intelligence Services are so troubled by the prospect of china controlling 5g they are uncomfortable even talking about it. It creates a major vulnerability. Ill just leave it at that. Back in arlington, alabama, the whole controversy seems very far away. Here everything stops for lunch. Fried chicken, that looks like ribs. Which means a trip to johns mothers house. Im the youngest of five kids. We all grew up here. We have deep roots here. Deep roots which tie john to his local community. He knows his customers. Many of them as friends. I feel like its pretty tight. Neighbors depend on each other. John says he brought chinese telecon gear to alabama because it worked well and fit his budget. He says now he feels like Collateral Damage in a wider international dispute. Is if you were to strip out the zte components and now the u. S. Government is saying those can be dangerous for national security, how much would that cost you to do . At least 8 million, more than likely at the end of the day closer to 10. Do you have that kind of money . We dont. We sure dont. Across america its estimated there are as many as 150 Small Companies like johns that have installed chinese equipment. Intelligence agencies believe the hardware use d to spy on americans is already here. Do you think that the Chinese Government is using the equipment that you have here in r your company to spy on americans . No, i dont. Certainly not seen any evidence of it. Never been told that was happening. Do you think that china would be interested in the data that you have that your servers are collecting about internet use, phone use in this kmount . Thats pretty unlikely. I doubt it. They are going to spy on the pine trees and cows . Probably not. Maybe hes right or maybe the cia is. Either way back object the other side of the world a nation that believes theres only room in the sky for one sun seems determined to continue its spectacular rise and take what it sees as its rightful place in the worltd. Is china is on a fast trajectory. It is big and bold and brash. Every three and a half days theres a new billion Dollar Company being created here. So right now were at the center of the new global economy. Youre looking at the new wall street. As a new yorker, im going to remember that line. This is the new new york skyline. Thats all for this edition of on assignment well see you again next time. Im richard engel. From all of us at nbc news, good night. Night. Y for what i need. Oh no, no, no, no, no, no, no. Only pay for what you need. Liberty. Liberty. Liberty. Liberty. v. Especially when your easily distracted teenager has the car. The worst. At subaru, were taking on distracted driving [ping] with sensors that alert you when your eyes are off the road. 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