60 Minutes - Sunday, September 18, 2016

Episode Date: September 19, 2016

Steve Kroft interviews Gary Johnson and his running mate, Bill Weld, the Libertarian candidates taking on the two-party system with many ideas outside the political mainstream. To learn more about listener data and our privacy practices visit: https://www.audacyinc.com/privacy-policy Learn more about your ad choices. Visit https://podcastchoices.com/adchoices

There are very few things that you can be certain of in life. But you can always be sure the sun will rise each morning. You can bet your bottom dollar that you'll always need air to breathe and water to drink. And, of course, you can rest assured that with Public Mobile's 5G subscription phone plans, you'll pay the same thing every month. With all of the mysteries that life has to offer, a few certainties can really go a long way. Subscribe today for the peace of mind you've been searching for. Public Mobile, different is calling. Wendy's most important deal of the day

has a fresh lineup. Pick any two breakfast items for $5. New four-piece French toast sticks, bacon or sausage wrap, English muffin sandwiches, value iced coffee, and more. Limited time only at participating Wendy's Taxes Extra. Wish you a pretty good day from now on. If you don't recognize them, the tall guy on the left is Vice Presidential Candidate Bill Weld. The shorter one is former New Mexico Governor and Presidential nominee Gary Johnson. Their rallies usually attract only a few hundred people, but they can still make some noise and are not without enthusiastic supporters. Gary! Gary!

The next president of the United States, Gary Johnson! You rock! You rock! Thank you! Woo! 1-3-0. 1-0. 1-3-0. 1-0. 1-3-8-4. USS Kentucky rising to the surface off the coast of Hawaii. Nearly two football fields long, it is the deadliest engine of destruction in the American arsenal.

Able to carry almost 200 nuclear warheads atop the missiles loaded beneath those hatches. If this boat were a country, you'd be a nuclear power. That's true, yes, sir. There's a new Cold War brewing between the US and Russia, and tonight you'll see what it looks like from inside Strategic Command Headquarters. In the remote hills of eastern China, this is a magic kingdom that not even Walt Disney could have dreamed up. It's called Hengdian World Studios,

and at over 7,000 acres, it's the largest film lot on the planet. You're going to use Hollywood directors, Hollywood stars, to make English-language films to compete with Hollywood. Yes, that's right. And make global blockbusters. Yes. Hollywood stars to make English language films to compete with Hollywood. And make global blockbusters. Yes. I think we'll be doing it in the next one or two years. I'm Steve Croft. I'm Leslie Stahl.

I'm Bill Whitaker. I'm David Martin. I'm Scott Pelley. Those stories tonight on 60 Minutes. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. When you look at your presidential ballot in November, somewhere below the Democratic and Republican lines, you'll find the Libertarian

Party and the Green Party. But for many voters this year, they might as well read none of the above. In a race that features the most unpopular Democratic and Republican Party choices in memory, they are the two alternatives to Hillary Clinton and Donald Trump. And for the first time in 16 years, third parties could well determine the outcome of the election. Right now, of the two alternatives, the Libertarian Party has the most support and is the only one on the ballot in all 50 states. The ticket of Gary Johnson and Bill Weld is currently favored by about 8 or 9 percent of the electorate, even though 70 percent of the

voters don't know who Johnson and Weld are. We thought it was time to give you a primer. If you don't recognize them, the tall guy on the left is Vice Presidential Candidate Bill Weld. The shorter one is former New Mexico Governor and Presidential nominee Gary Johnson. Right now, they can stroll through a park unmolested by the press and the public. Their rallies usually attract only a few hundred people, but they can still make some noise and are not without enthusiastic supporters. The next president of the United States, Gary Johnson. You rock. You rock. Thank you.

Why are you doing this? I think that we would do a really good job. I feel it's something of a patriotic duty, given how the election season is unfolding. We feel a responsibility to offer the country sort of a sober, sensible alternative. Has life in this country ever been better? They are not political neophytes.

Each one won two terms as Republican governors in heavily Democratic states. Do you really think you have a chance to win? Neither of us would be doing this if we didn't think that that was a possibility. Let me be a little skeptical here. I mean, right now, the people that do this for a living, they're trying to do polling and public opinion surveys. It make odds. Some of the most prominent experts put your chances at about less than one percent, than 1%. I think that Donald Trump started out that way, and I would have given him that percentage at the very start. But as crazy as this election

season is, I think it could be the ultimate crazy, and that is that the two of us actually do get elected. Right. And how does that happen? Well, presidential debates, a third alternative. Seventy percent of America doesn't even know who we are. And yet we exist. I think there's a lot of opportunity here and there's still a lot of time left. We are in a way breaking a glass ceiling. They're hoping to get a place in at least one of the presidential debates. But right now, they don't meet the threshold of 15 percent in the national poll. Are you running against a two party system? Absolutely. Absolutely. And I do believe this is going to be the demise of the Republican Party. So you see yourself as a protest vote?

No way. I think a conciliatory vote. Look, this is how we want to come together. It happens, Steve, if people do think for themselves and focus on the choices available, because the polling shows that nationally people do tend to agree with our approach. As Gary sometimes says, you're a libertarian, you just don't know it yet. Let's bring back liberty. The libertarians were founded 45 years ago as an offshoot of the Republicans. They tend to be fiscally conservative and social liberals who want the federal government out of their pockets, out of their schools, out of their computers, and out of their bedrooms. So the hats are all 25? They support the right to bear arms, even assault weapons.

But they also believe women have the right to an abortion, gays have the right to marry, and adults have the right to smoke pot. Anybody looking for a bumper sticker? They oppose almost every federal program not mentioned specifically in the Constitution, including Social Security and Medicare and the regulatory agencies.

You're making yourself seem like mainstream candidates, but in fact, you know, your positions and the positions of the party aren't mainstream. You know, you're for phasing out Medicare. You're for doing away with private health insurance as a way to bring down medical costs. You're talking about abolishing the IRS and imposing a 29 percent or 28 percent sales tax, essentially a sales tax. You call it a consumption tax. Talking about eliminating the Department of Homeland Security. I mean, these aren't exactly mainstream opinions. Well, what you can count on the two of us to provide is consistency. We're going to always be consistent in looking for lower taxes. And

much of what you cite is the libertarian platform, which, you know, we are the libertarian nominees for president and vice president, but we're not looking to eliminate Medicare. We do believe in a safety net, but there has to be reforms for Medicaid and Medicare and Social Security. And if we're going to put our heads in the sand, if we say we're going to do nothing in any of these areas, it's a fiscal cliff. And nobody can tell me that no changes are necessary in Washington. Those bozos think that unless the appropriation of every single account goes up 5 percent, they call that a cut. Well, that's not how we approach our state budgets, and that's not what we would do in Washington either.

Do you think most people want to do away with the Department of Homeland Security? Yeah, I do. I do. I think there's a real skepticism. I mean, really, we have the FBI. Why another agency? I mean, and all these Homeland Security cars driving around these days, what are they doing? There are functions that you'd have to retain and make sure they were attended to, but there are some who remind me of the muddled bureaucracy in Washington that nobody can quite tell you why they're essential, and that's where I would go hunting. They also want to abolish the Departments of Education, Commerce, and Housing and Urban Development.

They want to cut the defense budget by around 20 percent and get American troops out of Korea. As they've said, they don't agree with their party on everything. Sometimes they don't even agree with each other. Gary Johnson earned a fortune in construction before making his political name as the first governor to ever advocate the legalization of marijuana. And until earlier this year, he was CEO of a marijuana branding company. Until recently, you were a consumer of marijuana. One of 100 million Americans who have consumed marijuana. I am guilty.

The unforgivable in life, hypocrisy, saying one thing and doing another, telling the truth. I hope more than anything I'm credited here with telling the truth. But you're not using marijuana now? I'm not. Running on the libertarian ticket. Live free or die, baby. You know what they say. Former Massachusetts Governor Bill Weld is a card-carrying member of the Eastern establishment, whose libertarian bona fides are still questioned by the true believers. Until his nomination in May, he was a member of the nearly extinct political species known as moderate Republicans.

You weren't a libertarian until a couple of months ago. Well, I considered myself a small-L libertarian since the 1970s, and people called me the libertarian Republican. They run a frugal, low-key campaign in jeans and sneakers and keep a very loose schedule that can change hourly. When we were with them, their version of a presidential limousine was a rented red Toyota. Do you have a motorcade?

No, we don't have a motorcade. You stop for red lights? We do stop for red lights. Do you have a campaign plane? We don't have a campaign plane. We do fly commercial. Do you have a campaign headquarters? Yes. Yes, we do. But if you went to the campaign headquarters, you wouldn't find anybody there because this is social media. Come on, get selfie ready here. Let's do it.

They have a big presence on the Internet and claim to have 50 million followers, most of them young people. Johnson and Weld are good friends and say they plan to run a co-presidency sharing the same staff. On the campaign trail, they often stay at each other's homes. They've tried just about everything to get more attention in hopes that their campaign would go viral. And for a while, 10 days ago, it did. Governor, good to have you with us. But it was the wrong kind of attention when Johnson was unable to identify Aleppo as the center of the humanitarian crisis in Syria.

Aleppo. And what is Aleppo? You're kidding. No. You've been on the front page a lot this month. You made a big splash and it was a belly flop. We're talking about Aleppo here. Sure.

Tell me about Aleppo. I mean, how did that happen? Well, I blame no one but myself. I understand the underlying policy. People have said, this guy's not qualified to be president if he doesn't know what Aleppo is. How do you react to that? Well, that I am human, I have a filter, and it starts with honesty, it starts with the truth, it starts with transparency, and would serve as president in that capacity. When I was asked the question, the first thing that came into my mind was, this is an acronym,

Aleppo, American, would it sound familiar to you? Well, it didn't, or I think I would have been. But look, I do not in any way want to make an excuse for myself. You know, so many people have said, look, 90% of America doesn't know Aleppo. Well, 90% of America is not running for president of the United States. No excuse. But at the end of the day, this is just my view, is Aleppo is a very important place name, but it's a place name. Does that mean they're disqualified from running for president? I mean, you'd have very few people at the debates if that sort of thing was a disqualification to run. Thanks, Bill, but nonetheless, look, we are running for president and vice president. You're acknowledging that

your candidacy has some flaws. As do all candidacies. But I think... But nobody... I kept trying to remember a presidential candidate admitting that. Well, that is the difference here. That's what you're going to buy into, is that it will be transparent. And there's no quicker way to fix mistakes than actually acknowledging them in the first place. Do you have foreign policy advisors?

Well, certainly. Do you have military strategists? I wouldn't quite say that, but people that have worked for me and alongside me in the foreign policy area. Do you have any idea who you would appoint Secretary of Defense if you were elected? No, but I will. Weld says he has a short list of three or four candidates in mind, but he didn't want to name them. The country is in really deep trouble. When Johnson ran for president four years ago on the Libertarian ticket, he drew just 1% of the vote. This time, there's considerably more momentum and much higher expectations. What's changed? Well, a lot of it has to do with Trump and Clinton being as polarizing as they are.

I've always said this tongue in cheek. If Mickey Mouse were the third name on any poll, Mickey would be at 30 percent because Mickey's a known commodity. But Mickey's not on the ballot in all 50 states. And I think that when we get known, 70 percent of America right now doesn't even know who we are. Even if you're not in the debates, you're going to alter the course of this election. You're right, Steve. We're going to alter the course of this election, whether or not we're in the debates. And I think someone trying to guess what that influence is going to

be, that's very hard to predict. Right now, they're not even close to winning a single electoral vote, but they already have enough support to tip the scales to either Clinton or Trump in almost every battleground state. Who are you taking votes from? I think at the end of the day, it'll be more likely from Trump than from Clinton. Other people say, no, we have this big appeal to the millennials, so it'll be more from Clinton than Trump. This is my observation. You're much more antagonistic towards Donald Trump

than you are towards Mrs. Clinton. You must have done well in school. No, well, that may be Bill's outlook, but for me, this is both sides. This is, man, this is both barrels. And I'm not going to lose one minute of sleep ruining this two-party monopoly that is going on. I think they are dinosaurs. And I think we're the comet in this whole equation. And I'm glad for it. I'm proud of it.

The latest CBS News New York Times poll of likely voters shows Hillary Clinton leading Donald Trump by two percentage points in a head-to-head race. But when the Libertarians and the Green Party are added to the poll, Clinton and Trump are in a dead heat. The Libertarians have other surprising things to say about the November election. Go to 60minutesovertime.com, sponsored by Prevnar 13. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. One of the key questions of this presidential campaign is who has the health and temperament to become the next commander-in-chief and assume the unthinkable power to use nuclear

weapons. The Cold War as we knew it may be over, but both the U.S. and Russia still keep enough nuclear weapons on alert to end civilization. And now a new Cold War is brewing, with both sides developing more sophisticated and more accurate weapons. Tonight we're going to show you what this new Cold War looks like from inside the U.S. Strategic Command. STRATCOM, as it's called, trains every day for the possibility of nuclear war, and takes

extraordinary measures to make sure one person and one person only, the President of the United States, can give the order to launch a nuclear weapon. 1-3-0. 1-2-0. 1-1-0. 100 feet. 8-4. USS Kentucky rising to the surface off the coast of Hawaii.

Nearly two football fields long, it is the deadliest engine of destruction in the American arsenal, able to carry almost 200 nuclear warheads atop the missiles loaded beneath those hatches. Commander Brian Freck is the captain. The warheads that can be carried on my missiles are extremely powerful. Compare them to the bomb that leveled Hiroshima? Much more powerful than that. Much more powerful than Hiroshima. Up to 30 times more powerful. And on any given day, a number of these submarines are hiding somewhere in the world's oceans, ready to respond to a launch order from the president.

When you're out here, are other countries looking for you? I always operate on that assumption that someone is looking for me. Has anybody ever found you? No. Not even close. Are you sure? Yes, I am. 60 Minutes found the Kentucky, but only because we had arranged a rendezvous to go aboard.

If this boat were a country, you'd be a nuclear power. That's true, yes, sir. Does that ever give you pause to have all that power under your command? It's a lot of responsibility, but with that responsibility comes a lot of training and practice. Operating at a depth of 160 feet, the Kentucky's crew practiced the procedures needed to launch its missiles. Set condition 1SQ for training. This is the captain. This is an exercise. Set condition 1SQ for training. Calm weapons out. Set up all missiles. Chief of the watch, sound the general alarm.

Sound the general alarm, my sir. I have permission to fire. I'm up inside. Before that trigger can be squeezed, multiple keys, including one that unlocks the missile tubes, which take up approximately one-third of the ship, have to be brought out from different safes. No one person can make a launch happen. So I have keys in my possession. Other members of the crew have keys in their possession. One key is carried to the captain by two sailors, who both must hold it. Captain, the launch is authorized. And here's the thing you need to know about the safe where that key is kept.

No one on board has the combination. We get that combination with the launch order. That is my way of knowing that the president has ordered the launch, is when the combination he gives me opens that safe. The president literally gives you the combination to the safe that the key is in. Yes. You have permission to fire. Two weapons, you have permission to fire, right sir? Weapons, Con, you have permission to fire. The Kentucky and other nuclear missile submarines,

along with intercontinental ballistic missiles and nuclear bombers, Attention on deck. are under the command of Admiral Cecil Haney. Your nuclear forces are capable of executing all assigned missions. Head of the U.S. Strategic Command, Haney is the most powerful military officer you've never heard of, in command not just of the nation's nuclear forces, but its space satellites and cyber weapons as well. There are no significant solar activity causing impacts to satellite operations or communications. His morning briefing at Strategic Command

Headquarters in Omaha, Nebraska is classified above top secret. Thank you. I appreciate the update. That clockmark POTUS, short for President of the United States, tells Haney what time zone President Obama is in, in case he has to reach the commander in chief in a hurry. So who in the United States government has the authority to order the use of nuclear weapons? Only the president of the United States has that authority. Does Congress have to approve?

No, Congress does not have to approve. So these really are the president's own weapons. It's our nation's weapons with the president's authority. Attention on deck. Haney took us to his Global Operations Center, a top-secret facility three stories underground. If a missile were launched against the United States, the warning would be received here, and that clock would start ticking down. Colonel Barbara Buells was the watch commander.

I see this sign up here, red impact, blue impact time. So red impact would be an enemy missile? That is correct. And you would have a time? We would have a time to impact. And blue impact would be any U.S. counterattack. Lieutenant Colonel Brian Hyland would pull out the options for a retaliatory nuclear strike. My responsibility as the STRATCOM Nuclear Strike Advisor is to be the expert on Nuclear Decision Handbook

and the alert status of all U.S. nuclear forces. It's the Nuclear Decision Handbook. It's also known as the Black Book. So is there a copy of the Black Book down here? There is. It's in the safe down here. An identical copy of the Black Book is in that briefcase which follows the president wherever he goes.

So he's never away from the options. That's correct. And would they tell him what kinds of weapons you would use, what targets you would hit? They would be that specific, yes. Would they give him an estimate of casualties? Yeah. We would have to give the president answers

to a lot of different questions. That's one that I would expect to get. Admiral Haney would go to a room called the battle deck where he would talk directly to the president. And is this the phone you would use? This is one of the phones I might use, yes. Chairman of the Joint Chiefs of Staff, Secretary of Defense.

I don't see the man who controls... You're looking for the president. I am. I can speak to the president directly from this microphone. And in a crisis, how long does it take to get the president on the line? Not very long.

If Russia launched a missile from a submarine off the coast of the United States, it would take only minutes to reach its target. So how long, in fact, does the president have to make a decision? He has minutes, seven, eight, nine, depending on details, but less than 10 minutes. Former Secretary of Defense William Perry was a key architect of nuclear weapons during the Cold War with the Soviet Union. If the weapons can be launched within minutes,

does that mean we're still in the same old hair-trigger... Yes. ...standoff that we were during the Cold War? That's right. And we still have launch-on-warning, the same policy we had then. We still have the same hair-trigger response. So what's changed since the Cold War, if we're still on this hair-trigger alert?

Fundamentally, nothing has changed. But the numbers of weapons are much lower now than during the Cold War. The number of weapons are sufficient to destroy, obliterate all of civilization. Still? Still. It doesn't take that many. We still have more than a thousand nuclear weapons on alert, ready to go. It doesn't take a thousand to destroy civilization. At the end of the Cold War, both sides pledged to point their missiles at the open ocean.

But it would take just minutes to change back to real targets. That provides a small hedge against an accidental war triggered by a false alarm of the kind Perry experienced in 1979 when a watch officer mistakenly inserted a training tape into a computer. So it looked like 200 ICBMs were on the way from the Soviet Union to the United States. Happily, we got that situation figured out before we had to go to the president. But had we not, he would have received a call at 3 o'clock in the morning and said, sir, you have seven or eight minutes to decide whether to launch this before these missiles land on our ICBM silos. And what was the failsafe there? What stopped it from going to the president?

What stopped it was an astute general who sensed something was wrong. If you've had one serious case in 45 years, that would seem like a pretty good record. Yeah, it only takes one. It only takes one. Strategic Command is building a new $1.2 billion headquarters, but it won't be any more able to survive a nuclear blast than the underground command center in the current headquarters. That clock counting down the time to missile impact

would also tell Admiral Haney how long he had to get out of there alive. Safe escape time that you see indicated is the time left remaining for Admiral Haney, as the commander of USDRACOM, to exit the battle deck, to be able to make it to his commander support aircraft, to be able to board that aircraft and continue to provide his advice to the president of the United States as his senior nuclear advisor. On the tarmac at STRATCOM, air crews drill to take off in this airborne command post fast enough to escape incoming nuclear weapons. If Admiral Haney's headquarters were destroyed and he didn't make it out in time, it would be up to Rear Admiral Andy Lennon to assume command

and make sure the president and only the president could still give the order to launch nuclear weapons. We're in voice communications with the president. Talking to the president personally? Yes, sir. So that way we are ensuring that we're getting the president's intent. How do you know it's the president? We have some very complex and secure procedures to authenticate the president and to be sure that we're really talking to the president of the United States. So he can't just tell you this is the president speaking? He can, but we will authenticate to verify that it is the president speaking.

Once the president has given you that order, what do you do? Then we would communicate that order to our strategic forces, our intercontinental ballistic missiles, our bombers, or our submarines. Chief of the line, sound the general alarm. Sound the general alarm, sir.

The order would be received on board the Kentucky and the crew would go through launch procedures they have practiced hundreds of times before. Last year, the Kentucky actually fired an unarmed missile in a test flight which lit up the California sky and caused a brief UFO scare. Had it carried a real warhead, This is our meteorological effects officer. Stuart Miller, a young Air Force captain

aboard the Airborne Command Post, would begin charting the unthinkable. My main role is gathering information on nuclear detonations worldwide and then applying meteorological data to them, specifically winds, to figure out if there's fallout, depending on the attributes of the detonation, where the fallout's going, how many people might be affected, who might be affected, things of that nature. So you basically come up with a casualty estimate of... Essentially, yes. That's one of the things that I can provide. You must have looked at some pretty depressing scenarios.

We kind of do, yeah. Yes. Have you ever had the conversation with yourself, well, what if the president issued an order to use nuclear weapons and I didn't agree with it? Would I carry out that order? The president expects me as his combatant commander to provide him the best military advice I have. So he would expect me

to voice my opinion. You would have a voice, but if you disagreed with the decision... I'm a military man, and we follow the orders of our commander-in-chief. So what are the chances

the next president would actually have to make the fateful decision whether to use nuclear weapons? It's greater than you might think. That part of the story next Sunday on 60 Minutes. Welcome to Play It, a new podcast network featuring radio and TV personalities talking business, sports, tech, entertainment, and more. Play it at play.it. The Chinese economy is struggling, plagued by slowing growth and uncertainty in the stock markets. But there's one industry that is not suffering, the movie business.

For China, at its 1.3 billion people, going to the movies has become a national pastime, and China's expected to become the biggest movie market in the world in the next two years. Well, unsurprisingly, Hollywood has taken notice, partnering with Chinese studios and making blockbusters as much for the Chinese audience as the American one. But as Holly Williams first reported last April, the U.S. film industry is also facing competition from a new generation of Chinese moguls and movie stars with big ambitions. Tonight, a journey to a new Hollywood, rising in the East. In the remote hills of eastern China, this is a magic kingdom that not even Walt Disney could have dreamed up. It's called Hengdian World Studios, and at over 7,000 acres, it's the largest film lot on the planet.

A palace for every dynasty, a village for every era, where some of the biggest movies in China have been filmed over the last two decades. These sets aren't flimsy facades, but full-scale brick-and-mortar replicas of China's imperial past. And when the films wrap, a brief silence, before the sets are flooded by 15 million tourists who visit every year. It's all the domain of Xu Wenrong, a one-time farmer who realised his fields were fertile ground for a new industry.

Permission is hardly ever granted to film in the real Forbidden City, China's iconic landmark, so he built his own. It took several hundred years to build the real Forbidden City and it took you five years to build this one. You spent five years to build this one? Yes. And you made the whole thing from cement? Yes.

Xu got the idea for this place 20 years ago after a visit to Hollywood. Movies weren't big business in China back then, but he spent a billion dollars gambling on their growth. Do you feel a bit like an emperor when you come here? You're just an ordinary guy? An ordinary guy whose empire hosts 30 different productions every day. As the film crews compete for space with tourists who crowd the sets, straining to get a glimpse of the stars.

When the cameras start rolling, movie magic. The movie business is booming across China shopping malls have popped up everywhere and with them theaters 22 new movie screens open every day that's right every day in the last five years, box office receipts have grown a staggering 350%. It's created a kind of mass hysteria and something China's never seen before, star culture. Li Bingbing has been described as China's Angelina Jolie. It feels as if the movie industry here in China is getting more and more like Hollywood. The speed of the development, you can't imagine, even for us. It's changing so quickly. So quickly. You don't even react. It's already changed. And transformed into a multi-billion dollar industry.

Chinese studios produce over 600 features a year. Action movies. Sci-fi. Thrillers. Behind them is a group of pioneering movie moguls, like Dennis Wang. He once worked as a Chinese food delivery man in New York and is now chairman of the Huayi Brothers,

one of the largest studios in the country. The movie business has made him a billionaire, a capitalist with Chinese characteristics. Last year, he spent $30 million on a Picasso, which he keeps in his pocket and in one of his other homes. So that's the Picasso. And you bought it from the Goldwyn family, who own the MGM Studios in Hollywood.

So it's not so much a passing of the torch, it's a passing of the Picasso. The biggest prize isn't Picasso's, but Hollywood itself. This year, a Chinese company purchased a Hollywood studio for $3.5 billion. Others have been investing in multi-movie production deals with American companies to make films for the global market. You're going to use Hollywood directors, Hollywood stars

to make English-language films to compete with Hollywood. Yes, that's right. And make global blockbusters. Yes. Hollywood stars to make English language films to compete with Hollywood. And make global blockbusters. Yes. I think we'll be doing it in the next one or two years. Maybe in five years, we'll be doing it really well. In five years, you'll be competing with Hollywood. I think we can do it. Even though China's economy has slumped in the last year,

Dennis's brother James, the Huaiyi brothers' CEO, says the movie business is recession-proof. When the economy is weak, the movie business does really well. When times are bad, people go to the movies and feel happy, and it doesn't cost them much money. So the bad times actually could be good for the film industry. In the last 20 years, the biggest box office earners have come out when the economy is bad. It's interesting.

The sheer size of the Chinese market has Hollywood salivating and desperate to get in on the action. Dee Dee Nickerson is an American film producer who spent the last 20 years making movies in China. Today, if you sit in a green light meeting in a Hollywood studio, at any of the studios, at any of the major six studios there, China is part of every green light discussion. They're wondering, will Chinese audiences like this film? They have to, because oftentimes the Chinese box office is larger than the U.S. box office, especially for the big blockbuster films. Blockbusters like Transformers 4,

there remains a price on my head, which made $300 million in China, was partly filmed there, and co-stars Li Bingbing. But the Chinese government has a quota system, which only allows 34 foreign films into the country every year. To get around the rule, Hollywood has been co-producing movies in China with local studios. Kung Fu Panda 3 was animated in California and Shanghai at the same time. I lost my father. I'm very sorry. And co-produced by DreamWorks and its spin-off, Oriental DreamWorks. Then CEO James Fong showed us how they were tailoring the movie for both audiences.

What we've done is that we're actually reanimating everything around the mouth and the throat. So when you look at a Chinese version of the movie, you no longer have a misalignment between the voices and the lip movement. So in the Chinese version, they look as if they're speaking in Chinese. That's correct. Whereas in the U.S. version, they look as if they're speaking English. The Dumpling Squadron will take position here on my signal. Has this ever been done before?

This has never been done before. For years, the only movies anyone could watch in China were communist propaganda, revolutionary heroes, patriotic peasants and guerrilla soldiers. Those who strayed too far from the party line were thrown in jail, or worse. As a teenager, filmmaker Chen Kaige was pressured to denounce his own father, also a director, as an enemy of the state. I feel very, very guilty. But you were forced to do that by the political situation in China.

You were only 14 years old. No, I still feel guilty because I had a choice. I had a choice. In the 90s, after things had loosened up, Chen chose to make films that were critical of the regime, like Farewell, My Concubine, which earned two Oscar nominations and tells the story of opera singers

who were persecuted by communist henchmen. That movie helped put Chinese film on the map. But today, Chen, one of China's most venerated filmmakers, finds it hard to keep up. It's become big business. Exactly. Chinese people want to see popcorn movies, want to see blockbusters. That's totally understandable, you know.

They don't give a s**t. They just say, hey, we're here to watch a movie. They're a generation that's grown up on China's booming consumer culture. And on the surface, their lifestyles look more and more like young people's in the West. Prosperity has transformed China. It's no longer a closed communist country. But amidst all this modernity, the Chinese government still censors films and decides which ones can be shown in theatres. We asked to speak with the government officials who oversee the film industry here,

but they declined to be interviewed. Some things haven't changed. It's not easy filming anything in China. Those were just private security guards. But when it comes to making movies, the government's involved in almost every step of the process, from deciding which movies get made to screening the final cut. Censors held up this World War II epic, City of of life and death for the better part of a year because the film depicted soldiers from japan china's wartime enemy in a flattering light lu chuan was its director some newspaper just put me as a traitor. A traitor? Yes, yes, yes.

Because you dared to show a Japanese soldier as a human being? Yes. He wasn't certain his recent film, a monster movie, Chronicles of the Ghostly Tribe, would fare any better. Even though it has nothing to do with politics. It's very realistic looking. Yes. Very frightening. That's my goal. Three years ago, the government didn't allow monster movies. Today, it does. Navigating the whims of the senses can be treacherous and confusing. They will determine the fate of your movie. And can you argue with them?

You can talk, you can argue, yes. Does it work? Sometimes, but you have to compromise. Hollywood's been compromising to please the censors too, cutting whole sections out of films before they're released in China, like scenes depicting Chinese bad guys in Men in Black 3. You arrest me, that's a hate crime. It would be if you were Chinese.

But Dee Dee Nickerson, the China-based American producer, thinks US studios are learning how to avoid that kind of meddling by the government. You'll see less and less of that because China is so important to Hollywood that I would say that those decisions are going to get made when a film is being greenlit, to be careful about what may be offensive to Chinese people

or to the Chinese authorities. So they won't need to cut scenes? They just won't make them in the first place? They won't make them in the first place. Self-censorship is the cost of doing business in China and a price US studios are willing to pay. But Hollywood's biggest challenge isn't Chinese government interference. It's competition from a young and dynamic industry.

They're smart. They understand storytelling. They are super well-versed in what works in their own country. They're super well-versed in what works in their own country. They're super well-versed in what works globally. I couldn't be more excited. So I would say, you know, Hollywood, watch out.