The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. I'm Jim Lehrer in Washington.

MR. MacNeil: And I'm Robert MacNeil in New York. After tonight's News Summary, we discuss organized labor's role in fighting NAFTA, we begin a series of reports from China by Special Correspondent Robert Oxnam, tonight on the economy. Charlayne Hunter-Gault talks to two innovative, young bankers, and essayist Anne Taylor Fleming has thoughts on single sex schools. NEWS SUMMARY

MR. LEHRER: AFL-CIO president Lane Kirkland continued the back and forth with President Clinton today over NAFTA. Yesterday the President said on NBC's "Meet the Press" labor has used raw muscle and naked pressure to influence undecided Democrats in Congress to vote against the trade agreement. In Washington this morning, Kirkland was asked to respond.

LANE KIRKLAND, President, AFL-CIO: Well, I think the President is gravely misinformed and ill-advised. In the first place, we do not coercive or strong-arm tactics. We, we're smart enough to know that any such approach would be useless and would defeat our purposes. We do represent our members and their strongly felt views. It is a right under the Constitution to make certain that the members of Congress hear those views.

MR. LEHRER: White House Chief of Staff Mack McLarty said the administration had a lot of common ground with Labor but a difference of opinion on NAFTA. Treasury Sec. Bentsen had this comment at a White House briefing.

LLOYD BENTSEN, Secretary of the Treasury: I think they're so wrong on this one that I have difficulty understanding the rationalization from the other side. It is something where we've increased our productivity in this country. We've increased the quality of our products, the cost of our capital is far more competitive, and then I look at some of the problems in these other countries. We're ready to take them on. I think America can take on the rest of the world in trade. I think we should.

MR. LEHRER: We'll have more on this story right after the News Summary. Ross Perot will debate Vice President Gore on the NAFTA issue tomorrow night. Perot said yesterday he had received a death threat because of his anti-NAFTA activities. He said he had been targeted by an organized crime group which wanted to smuggle drugs into the United States and shipments of produce from Mexico. A Justice Department spokesman said authorities had received the tip from a man in a Mexican prison but could not confirm its authenticity. Robin.

MR. MacNeil: Israel and the Palestinians resumed peace talks in Egypt today despite new violence in the occupied territories. The talks on implementing the Israeli-PLO Peace Accord had broken off last week. The Palestinians said Israel's proposal for withdrawal from Gaza and the West Bank Town of Jericho was not adequate. They returned to the table after receiving assurances from Egypt of new flexibility in Israel's position. The violence took place in the West Bank, where thousands of Jewish settlers protested the killing of one of their number yesterday by Arab gunmen. We have a report narrated by David Symonds of Worldwide Television News.

DAVID SYMONDS, WTN: Road blocks were manned throughout the night as settlers voiced their outrage at the latest killing. The Israeli government wants to isolate the settlers but with each new death Jewish opinion hardens. This time retribution was swift. Settlers wounded at least five Palestinians as they vented their anger indiscriminately. The army was on hand to quell the flames but the ire of the settlers couldn't easily be quenched. But unless they can rein in extremists hell bent on fueling discord between the two sides, Palestinians remain vulnerable to Israeli revenge attacks. Arafat supporter Faisal Husseini knows the problems.

FAISAL HUSSEINI, Palestinian Spokesman: They are not able to control the situation, so we are asking for international protection.

MR. MacNeil: Israeli Prime Minister Yitzhak Rabin later vowed to stop the settlers from carrying out vigilante attacks on Palestinians. Jordan today held its first multi-party general election since 1956, and the outcome could affect the Middle East peace process. Fundamentalists opposed to Arab-Israeli peace predicted they would continue to hold the largest bloc in parliament. But a coalition of conservatives and other members who support King Hussein's pro-peace position were expected to retain a majority. The legislature would have to ratify any peace agreement between Israel and Jordan.

MR. LEHRER: President Yeltsin approved a draft of Russia's first post-Soviet Constitution today. The document consolidates his power as president. It has Yeltsin serving until 1996 instead of submitting to elections next June, as he had promised. The Constitution will be put before voters December 12th, the same day they elect a parliament to replace the one Yeltsin dissolved. About 100 Serb civilians left Sarajevo today in the first major evacuation of the Bosnian capital since May. Another 600 were also slated to leave for the Serb capital, Belgrade. Two of the buses were fired on but no one was hurt. Croats and Muslims will be evacuated later under an agreement between the warring parties.

MR. MacNeil: Firefighters in Malibu, California, were putting out the final embers today from brushfires which destroyed nearly 400 homes in the area last week and caused three deaths. A man was arraigned today in Los Angeles on charges of sending as many as 35 arson threats through the mail. But officials have not charged him with setting any of the Southern California fires. The letters were written in September. The writer said he would set a number of fires to settle a score with the federal government for seizure of his property.

MR. LEHRER: There was a major art theft last night in Stockholm, Sweden. Thieves cut through the roof of the Museum of Modern Art and made off with paintings and sculpture by Pablo Picasso and George Brock valued at about $60 million. They did it without tripping the alarm system. The theft was not discovered until a cleaning woman noticed a hole in the ceiling this morning. Authorities said the eight pieces were tell well known to be sold on the open market.

MR. MacNeil: That's our summary of the news. Now, labor fights NAFTA, China's economy, a Charlayne Hunter-Gault conversation, and Anne Taylor Fleming on single-sex schools. FOCUS - LOADED DEBATE

MR. LEHRER: President Clinton versus organized labor is our lead story tonight. They are fighting over the trade deal called NAFTA, the North American Free Trade Agreement. It broke way out into the open yesterday when the President said he still needed the votes of 30 more House members to win the November 17th NAFTA vote. And he knocked labor's lobbying tactics. He spoke on NBC's "Meet the Press."

PRESIDENT CLINTON: [NBC's "Meet the Press"] The vociferous, organized opposition of most of the unions telling these members in private they'll never give them any money again, they'll get 'em opponents in the primary, you know, the real rough shod, muscle bound tactics, plus the fact that a lot of the business supporters of NAFTA have not gotten their employees and rank and file people to call and say they're for it. In any issue like this the intensity is always with people who are against it. Our big problem is the raw muscle that was sort of a naked pressure that the labor forces have put on it.

SPOKESMAN: Are you afraid the Democratic Congressmen are in the pocket of labor?

PRESIDENT CLINTON: No, I didn't say that, but I said that a lot of them are saying, well, I'm not hearing from these business people who are for it. Their employees are not telling me they're for it, and I'm hearing from all these people either pleading with me based on friendship or threatening me based on money and working the campaign, and I don't hear it.

MR. LEHRER: We ventilate this dispute now with Thomas Donahue, secretary-treasurer of the 13-million member AFL-CIO, and Sandra Masur, director of international trade for Eastman Kodak, she's a member of the USA NAFTA Coalition, a group of more than 3600 companies and trade associations who support NAFTA. Mr. Donahue, is organized labor putting raw muscle, naked pressure on members of Congress to vote against NAFTA?

MR. DONAHUE: I think that's an unfortunate description of citizens appealing to their Congressman to vote a certain way on an issue, to vote in ways in which those citizens think would advantage them. I think it's just an unfortunate characterization the President chose.

MR. LEHRER: Clearly, the President was referring to representatives of organized labor telling members of Congress, look, you vote for NAFTA and we, organized labor, will make sure you have an opponent, or if you have an opponent, we'll support your opponent, if you don't have an opponent, we'll find one. Is that raw muscle, is that bad stuff?

MR. DONAHUE: The Washington Post or the New York Times about two weeks ago reported that same story from the perspective of the Chicago Congressman Louis Gutierrez, who said he'd been told that by the Daley machine. People are very intense about this issue. People understand. This is an issue that affects their jobs and their livelihoods, and they're very intensely lobbying the Congress on the issue. It is not a matter of what people say on Capitol Hill, or people talking, lobbying representatives, talking to Congressmen. Every Congressman tells you that when they go home, they talked to more people on this issue than on any issue in years.

MR. LEHRER: But as a practical matter, if there were representatives of unions telling members of Congress that particular thing, we will support your opponent or find an opponent, that, that's okay with you, right? I mean, you don't consider that unwarranted or bad news stuff.

MR. DONAHUE: No. I've denied that that happened on behalf of the AFL-CIO. We have individual unions within the federation who are primarily manufacturing industry unions and who have taken that position very clearly. The IUA and other unions have said we cannot support anybody who favors the shipment of our jobs out of the United States. I don't think that's an unreasonable position for them to take. Individual unions have said precisely that.

MR. LEHRER: Ms. Masur, from the other side, do you think the -- do you agree with the President, that organized labor, either individually as unions or in some general way, is going at this in a kind of raw, rough shod way?

MS. MASUR: I don't really want to get into that fight particularly. I don't think that's very useful. It's a very, very intense debate, and there's a lot of passion on both sides. And I think that passion is coming out, so I think it is something the next 10 days we're going to see a lot of heat both here in Washington and out in the districts and a lot of pressure, a lot of tension on the issue.

MR. LEHRER: The President had a few knocks for your side as well. He said that the business people who are pro-NAFTA have not been doing what Labor is doing. In other words, they have not been -- you have not been generating people who are pro-NAFTA to call members of Congress -- in other words you haven't been playing the game as well as labor's been playing it.

MS. MASUR: Well, the only thing I want to say about that is we're working very hard, and I think that the fruits of our labor are beginning to show. I know that in offices now they're starting to say that the mail is coming in five to one for NAFTA. I know of members who've gotten 150 phone calls in the last couple of days, five visits in the last few days, so we are doing a lot of work on this issue. We're working very closely with the administration. We think the administration is doing a great job. And we'll see what happens 10 days from now, but we're putting in an all out effort.

MR. LEHRER: Mr. Donahue, both of you now have said this is very intense. You've said people out in the country are talking about this more than just about anything else. I would -- I would venture to say that as of about three or four weeks ago if you'd have said NAFTA, people would have thought it was an insect of some kind. What has brought it on so intensely these last couple of three weeks?

MR. DONAHUE: I don't think that would have been true as to our members who know very well what's happened to their jobs over the years. They've been into this for the last three years. This is not a new position for us. We've said it was a bad idea three years ago. We've said it was a bad idea in the campaign. We tried to suggest to Candidate Clinton that he should take a position in opposition to NAFTA, and he didn't. And we supported him for election.

MR. LEHRER: No, I mean the intensity. I agree. I mean, sure, the position has been the same.

MR. DONAHUE: The intensity is growing because of the nearness of the date, the intensity particularly in the last week has grown because the President and the administration are working very so hard -- so very hard to catch up. There's no question they're behind in terms of the vote counts on the Hill, and they're working very hard to catch up. I think, you know, they're reaching out rather desperately to, to capture whatever the number of votes is that they need. I think the President underestimates it when he says 30, but whatever the number is, they're working very hard to, to accumulate those votes.

MR. LEHRER: Is desperation the right word, Ms. Masur, for your side?

MS. MASUR: No. I wouldn't think so at all. I think that we are optimistic we will win because I think as Henry Kissinger said and others, this is a defining moment for the United States, for our future, for the direction of this country, whether we are future- oriented, whether we're going to take advantage of opportunity, whether we're going to turn our back, become protectionists, and seize a leadership role in the world. And I think when push comes to shove, members of Congress, including members of the President's own party will recognize that a vote against NAFTA is not only a vote against the future and U.S. leadership but also a vote against jobs in this country and opportunity.

MR. LEHRER: What is the intensity button that the pro side has to push? The President said in the clip that it's always easier to be intense about something if you're opposed to it rather than if you're for something. What button do you have to push between now and November the 17th?

MS. MASUR: Well, I think there are a number of buttons that do resonate. I do think that people are beginning to understand that the jobs issue is not one way, as my colleague, Mr. Donahue, would suggest but that, in fact, jobs are created by exports, and Mexico is a big market, and people are beginning to understand that. I think the whole notion of Japan taking advantage if we don't see the opportunities beginning to take hold with people that this our unique opportunity to establish a trade relationship for the future with Mexico, a large market, and if we don't do it, somebody else will, and if we don't do it, others will move into Latin America. But this is our hemisphere, we must have markets, and I think people are understanding that. I also think that they are beginning to understand that from a foreign policy/U.S. role in the world type of argument that we cannot turn our backs. The last time we did that was Smoot-Hawley, and I do not think that we can do that again today, and I think that people understand that for this country it would be a terrible, terrible signal.

MR. DONAHUE: Can I --

MR. LEHRER: Sure.

MR. DONAHUE: The Smoot-Hawley argument, you know, it takes us back to 1930 to a world that was so different from anything that is remotely connected to today's world. The facts are the CNN poll over the weekend tells you 48 percent of the American people oppose this agreement, 36 percent favor it. That's the reality. People understand trade. This brought it home to them. It did for trade, I think, what televising the Vietnam War did for war. It brought it into people's houses. And they understand that everybody lives in a community that's lost jobs. The people know there are 600,000 jobs in Mexico created by American companies that ran south to cheap wages. The arguments are made that, well, this will make us competitive, more competitive in the world. Translation: This will give us a low-wage partner. We will be able to employ people in Mexico for a buck and a half an hour. That's what it says.

MR. LEHRER: What about Ms. Masur's argument -- the President's also made this argument too -- yes, there may be some jobs lost, but where do you want to lose them? Do you want to lose them to Japan and Taiwan, or do you want to lose them to Mexico, our own hemisphere, where we have an opportunity to build up resources so they can buy our products and create more jobs going the other way?

MR. DONAHUE: I don't want to lose any at all. The President promised us policies which would relate to jobs, jobs, jobs. You're going to create American jobs. The argument about Japan is just a silly one. Japan wants this agreement to go through, so they can move plants into Mexico and have the advantage of no tariffs. They won't come to the United States and invest here anymore. They'll go to Mexico and invest. Without this agreement, Japan is not so advantaged. Japan has a tough negotiation with us without an agreement.

MR. LEHRER: Ms. Masur.

MS. MASUR: I have to respond on the jobs issue. The fact is right now we have a $6 billion trade surplus with Mexico. That means we're sending $6 billion more stuff into Mexico that stays in Mexico than they are selling to us. That's jobs in this country. That's net job creation in this county. With the NAFTA, that reduces tariffs from the United States into Mexico, we're not just leveling the playing field for U.S. manufacturing to sell into Mexico, we're tilting it for our advantage. It is a fantastic deal for us. I think for every person who sees a job lost in this country, more and more people are seeing that their jobs are tied to exports, that our future in this country depends on having markets. Mexico is a large growing market. With the NAFTA we lock that market in for the United States and create enormous opportunity. So I do not want to see that jobs argument for one moment.

MR. DONAHUE: Three weeks ago the President told us this is just a little agreement, it's a very small thing, it'll have a very small economic effect. As of yesterday, he tells me that the future of the free world depends on our passing the NAFTA agreement. Well, they can't both be true. I mean, that's silly. So our position in the world is the position of a nation with 250 million consumers. To, to get into that market, countries do anything they can. They want to sell here. Mexico wants to sell in the United States some of its products. More than that, it wants U.S. investment in Mexico. This is not an agreement about trade. The President could have lowered tariffs on its own negotiation with Salinas. They could have agreed easily to reduce tariffs. What we needed was a promise from Salinas that he would protect the American corporations investing in Mexico so they could repatriate their profits and so forth.

MR. LEHRER: Mr. Donahue, are you uncomfortable as a leader of organized labor being on the opposite side of a Democratic President who ran with your support and won?

MR. DONAHUE: Sure. I'm uncomfortable but we, we have explained this over the last year to the President. We support this President and want him very much to succeed. We want him to succeed in the goals he set, create jobs in America. So we want success for him. He just happens to be wrong on this issue. He is blinded by the concept of free trade which doesn't exist in the world.

MR. LEHRER: Are you and your fellow business persons comfortable being on the side of a Democratic President against organized labor?

MS. MASUR: Absolutely.

MR. LEHRER: And Ross Perot?

MS. MASUR: Absolutely. I'm much more comfortable being with the President, every living Nobel Prize winner in economics, every former President, every secretary of state, than Ross Perot, Patrick Buchanan, and Ralph Nader on the other side. Those strike me as a bit on the fringe. I like to be in the center where America has always been, where our leadership has been. So I'm very comfortable with that position.

MR. DONAHUE: None of those people mentioned who support the agreement are going to lose their jobs if it goes through.

MR. LEHRER: Thank you both very much.

MR. DONAHUE: Thank you.

MR. MacNeil: Still ahead on the NewsHour, China's mixed economy, a Charlayne Hunter-Gault conversation, and an Anne Taylor Fleming essay. SERIES - CHINA IN TRANSITION - MAO TO MARKETS

MR. MacNeil: Next tonight, the NewsHour begins a multi-part series on China, exploring its emergence as a free wheeling, economic colossus, while it remains a politically repressive Communist state. China will be a powerful presence at next week's meeting of Pacific Rim nations hosted by President Clinton in Seattle. Our series starts this week with three segments on China's economy. They'll be followed by reports on other aspects of modern Chinese life. Our special correspondent is China scholar Robert Oxnam, former president of the Asia Society, now at Columbia University, and the Bessemer Group, a New York-based investment institution.

MR. OXNAM: All over China people are jumping into the sea. That's the new Chinese expression for going into business, making money privately in a country that used to forbid any form of capitalism. It means saving a few dollars for the simple tools to fix bicycles at a curbside shop, or running a sidewalk shoe repair stand because new soles are still cheaper than new shoes, or cutting hair at 5:30 in the morning before going to a regular job. In the country, a wife grows produce to make extra income to buy consumer goods for her family. Unleashing the natural business instincts of the Chinese people, plus the addition of huge foreign investments have fueled one of the most explosive economic take-offs in history. Around major cities, buildings, housing projects, and roads seem to emerge almost overnight. It's even been suggested that China's national bird should be the crane. Every urban horizon is filled with cranes. In Shanghai's frenzied harbor, ships from around the world compete with tiny river barges as they haul goods and move people. Once the people of China were caught in economic slow motion by a state which prized ideology above all else. Now the Chinese are rushing in fast forward in a national quest for prosperity.

LI QINGYUAN, Government Economic Adviser: The mentality and psychology are changing.

MR. OXNAM: And changing drastically, says Li Qingyuan, one of China's leading economists and government advisers.

LI QINGYUAN: In the past, the egalitarianism was dominant and the people thought they should be sort of equal, but what's the point of equality while the living standard on the whole is very low? Now, if you want to make market work, then you have to have some incentive, and those who can -- who have great abilities should be rewarded. Those who contribute more should get more, and this is understood I think generally by the Chinese people.

MR. OXNAM: In the 1990s, Adam Smith's capitalism is much more evident than Carl Marx's communism. Today visitors look long and hard to find wall slogans such as this one commemorating the 70th anniversary of the Chinese Communist Party. The Party has made a deal with the capitalist devil to boost China's economy, at least that's the view of human rights activist Robin Munro.

ROBIN MUNRO, Human Rights Activist: In fact, it's, it's highly arguable that one of Deng Xiaoping's motives in starting economic reform was -- 10 years ago -- was the authority of the party, Communist Party, at that time just after the cultural revolution, had sunk so low that the party had to make major concessions to the public. It had to give them something. If it couldn't give them freedom, at least it could give them more food on the table, greater income. So there was a kind of historic bargain struck at that time where the Party said, let us keep our monopoly on political power, and in return, we will give you more goods on the table. And that argument has been sustained right up to present.

MR. OXNAM: Shanghai's vice mayor, Shu Quan Di, insists the party still has a powerful economic role.

SHU QUAN DI: I think because in the new period the main task of the party is the development of the economy in China. They don't take a hand directly in the economic efforts and directly do some business. But we still have the party organization and all the excellent leaders from the enterprises, companies, and the universities, research institutes, and also the government organizations. They belong to the party. They are party members. So I think that is the influence of the party.

MR. OXNAM: The Party influenced the designation of several large coastal cities as special economic zones with incentives to lure foreign investment. Shenzhen, the most famous special economic zone, is right across the border from Hong Kong. Some people call it China's Wild West. It does have a rough and ready frontier spirit about it with huge amounts of money pouring in from around the world. But instead of cowboys, it has young entrepreneurs riding bicycles, motor bikes, driving cars, as they ride herd on their investments. Shenzhen's businessmen don't waste a minute. The secret to China's rapid growth, like that of South Korea, Taiwan, and Japan, is highly motivated people. Many observers see modern takeoff as a new application of the ancient virtues of Confucius, hard work, discipline, and a passion for education. A textbook example of how to really strike it rich can be found at this boutique in Beijing. Forty-two year old Yeng Jum Wei is the manager of 10 Pierre Cardin stores in China's capital city. Yeng proudly displays a photo of Cardin, himself, giving Yeng the rights to market pricey apparel. Customerslook over suits costing eighteen hundred to twenty-three hundred yuan, that's three hundred to four hundred U.S. dollars, more than many Chinese make in a whole year. The clientele is definitely up scale.

YENG JUM WEI: For sure, but for the businessman and for the rich people, the yuppie, something like that; it's not big money.

MR. OXNAM: Yeng's business has been booming, netting more than half of a million U.S. dollars a year since he opened in 1989. Tales of commercial success abound in today's China, but Yeng says he has an altruistic goal as well, creating jobs by investing his profit.

YENG JUM WEI: I'm not the common businessman. I have much more rational thinking than the others. So for me the process is more important than the result. So I do much more aggressive investment.

MR. OXNAM: Yeng was once a high ranking economic adviser to former premier Xao Ziyang, who fell from power during the Tiananmen Square protest in 1989. Yeng drives a Lexus, one of his four automobiles. He reinvests in new enterprises such as this small, modern knitting mill. Thirty employees, mainly young women, work eight hour shifts. They earn sixty to eighty dollars a month, a solid wage by China's standard. The factory churns out 50 pairs of socks an hour, twenty-four hours a day year-round. Yeng runs a cosmopolitan operation. His major partner, Frank Chung, is from Taiwan. That means Taiwan money helps make French-designed socks in mainland China. The machines are from South Korea. The market is global. But other entrepreneurs have more modest expectations. This woman runs a private stall in an area of Beijing known as Silk Alley. She pays the government a small monthly fee and takes her profit home in cash.

WOMAN: [speaking through interpreter] Most of the customers here are foreigners. Some Chinese also shop here. This is one of the cheapest markets in Beijing.

MR. OXNAM: She offers the kind of bargains on international designer clothes that would put a smile on the ancient Chinese God of Wealth. At Beijing's cotton market, it's not surprising the mannequins are caucasian. So are many of the big customers. Russian and Eastern Europeans swarm over the goods, buying clothes such as these blue jeans in bulk for resale back home. They carry wads of money, often concealed, to make deals. Not all the money is made in private enterprises. This Shanghai paper flower shop is a collective. New management, a devoted cadre of seven female workers, and economic reform have made it profitable.

WOMAN: [speaking through interpreter] The reforms are very good. The standard of living is much higher than before. Our market income has risen from two hundred to five hundred yen a month.

MR. OXNAM: The women pay a physical price. The meticulous work often produces neck and back pain requiring a daily half hour of traditional Chinese medicine, a practice called moxibustion, infusing herbs into the skin under heated glass jars. It's another price of prosperity. For the first time in their lives many Chinese have money to spend. Ambitious people moonlight at two or even three jobs. And adult family members are expected to pool their resources so the whole family can enjoy consumer goods. Spending money now seems to occupy as much attention as making it. Beijing's Yahan Department Store is a magnet for shoppers. Women sample international brands of cosmetics. Japanese television sets attract viewers. Water heaters are plentiful, important to Chinese who live primarily in cold water flats. A well stocked supermarket contains packaged goods from around theworld and as an added attraction, there's a swimming pool where the bargain basement should be. The shoppers here are primarily mainland Chinese, not just from Beijing but from around the country. This family traveled for several hours to get here. Their daughter says she loves the toy department. They're part of China's new middle class, according to James McGregor, Beijing correspondent for the Wall Street Journal.

JAMES McGREGOR, The Wall Street Journal: People that can afford to go to a restaurant are called the middle class I would guess, people that have disposable money that they can play with and prove their lives with, people that can go buy nice clothes, people that can go to restaurants, people that can even travel inside of China on their vacation, I would call that middle class, and by those standards, yeah, there's a big middle class in China now. There's a lot of people with disposable income.

MR. OXNAM: A surprising by-product of China's affluence is the young generation with growing numbers of fat children, little emperors or little meatballs as they're sometimes called in Chinese. They're the spoiled children of China's one-child policy. In a society which has known starvation, new wealth makes bourgeois addictions possible. In Shanghai, China's largest city, bourgeois values have replaced the once austere doctrine of Chairman Mao's cultural revolution. A visit to Nanjing Road, now a mecca for shoppers, makes it difficult to recall that Shanghai is the birthplace of the Chinese Communist Party. Many Chinese are especially proud of Shanghai. A TV tower under construction here will be the third tallest in the world, trailing only Moscow and Toronto. Workers boast that it is being built totally with Chinese labor, Chinese engineering, and Chinese capital. Shanghai is also home to China's principal stock exchange. Until this year, the exchange did a booming business, but tightened credit has caused the slowdown that leaves traders snoozing at their desks. Across town, investors have taken over an Eastern Orthodox Church dating from the late 19th Century. When its doors open there are no bearded priests, only stockbrokers and customers. It's located on New Happiness Road, a happiness spawned by having money to play the market. Economist Li Qingyuan often discusses the stock market on her television talk show.

LI QINGYUAN: I personally receive phone calls asking should I invest in certain things, what do you think, do you think that company will be listed? These are the things many people are interested because obviously many people have extra money to spend now.

MR. OXNAM: Next to the brokerage is a place where investors can spend their capital gains, an old parsonage, now a brand new night spot, the St. Peter's Club. The investment capital for the bar comes from the local government. It's private initiative with public financing. Yet, there's no mistaking commercialism. The sign on the rectory advertises brandy and says, "When you open a Remi Martin, good things naturally happen." China's economic optimism is reflected in Shenzhen's stock exchange, housed in a glass building called the Grand Theater. Across the street is a billboard commemorating Deng Xaioping's 1992 visit to this boom town. The slogan says, "Hold firmly to the basic line of the party for 100 years without wavering." That line used to emphasize ideology above all else, but today the line is drawn from Deng's famous quotation to be rich is glorious. At the sunset of the Deng era, the survival of that new line depends on two things: First, on how well the government can handle its serious economic problem. People on fixed incomes complain bitterly of run away inflation. The government is now imposing tough measures to cool its overheating industrial engine. Migrant laborers by the tens of millions clog train stations and create an atmosphere of homelessness. And pollution chokes residents in all big industrial cities. The future of the new line also depends on whether Deng's successors perpetuate his vision. Many contenders do share a commitment to modernization and trade. But they often differ on tactics and timing and on which of them should be in command. Eventually, those differences will be worked out by a handful of men who will meet secretly behind this gate in a corner of Beijing's forbidden city.

MR. MacNeil: Tomorrow night we'll look at the down side of China's economic take-off. CONVERSATION - BANKING IN THE HOOD

MR. LEHRER: Now a Charlayne Hunter-Gault conversation. It is with two young men who think it's good business to do business in one of New York City's poorest neighborhoods.

MS. HUNTER-GAULT: This is Bedford Styvesant, the Brooklyn neighborhood widely known as Bed-Sty. It's a diverse, mostly low income community made up largely of African-Americans and Caribbean immigrants. Over the years there have been a number of government programs aimed at revising the area with mixed results. Local merchants recently hung banners to promote a new sense of community pride, but Bed-Sty continues to experience hard times. At least four neighborhood banks, potential sources of investment, have closed in recent years, and capital for development is almost impossible to find. Now two young men from the area are trying to change that. Nicknamed "the hip hop bankers," they speak the language of the urban street as well as Wall Street. They are Mark Griffith, a 30 year old Brown University graduate, writer, and political activist, and Errol Louis, 31 years old, a graduate of Harvard and Yale, and a former associate director of a credit union association. Together they founded the Central Brooklyn Federal Credit Union. Its goal, to take the wealth of the black community and to reinvest it in the community. The credit union has been up and running since April. I talked to them recently about how it's doing.

MS. HUNTER-GAULT: Well, Errol Louis and Martin Griffith, thank you for joining us. What is this all about? Tell me how it works, and what -- how you got into it.

ERROL LOUIS, Banker: Well, how it basically works is we have what would be really in some way a democratic community-owned bank. It's a banking institution where you can save and borrow. There's federal insurance for savings of 200,000 per account just like any other bank or credit union. The difference in our case is that we've chosen to serve all the people who live or work or belong to civic organizations or religious organizations in central Brooklyn, the communities of Bedford Styvesant and Prospect Heights, Crown Heights, the surrounding area, and what that means is that in this very special community, which is really the heart of the African-American community, for -- or I should say part of the twin hearts of the African-American community in New York City, the other, of course, being Harlem. We're trying to make a difference. We're trying to provide a place for people to aggregate their savings, to get loans of a type that banks wouldn't normally make, to pool our resources and get about the business of reconstructing the community.

MS. HUNTER-GAULT: Where does the money come from?

ERROL LOUIS: The money comes from people's savings. There is a lot of it. We did a study on what is a very low income community, our community, central Brooklyn, and what we found was that in the late '80s there was on average, on any given day in other words, about $630 million on deposit in the local bank branches.

MS. HUNTER-GAULT: And banks wouldn't lend to people with that much money?

ERROL LOUIS: No, no. That's really the answer. I mean, in some cases you see the disclosure of information only is limited to housing type lending, mortgages, and home repair, but you'd see all these zeroes. We put it all on a chart, you see all these zeroes, '87, '88, certain banks made no loans in this community of about 400,000 people. And, and that's despite having all of those funds on hand. There was one bank that was telling local merchants they weren't going to open new accounts for them, meaning that a local merchant would have to go to the laundromat to make change and stuff like that.

MS. HUNTER-GAULT: So what happens now? People come to you, and give you their money to put in the credit union, and then you use that money to make loans.

ERROL LOUIS: Exactly. We have a million in assets right now.

MS. HUNTER-GAULT: And did that all come from savings, or did you have some other --

MARK WINSTON GRIFFITH, Banker: No. We talked with several banks in the area who I think all understand the extent to which they have taken money out of the community and haven't put it back in, so we've gotten a lot of the banks from within the community to make large deposits in the credit union as well.

MS. HUNTER-GAULT: How did you convince them to do that, given their history and given your history? You don't have any experience in this, and you're hip hop guys, you know. Well, you're not but - -

MARK WINSTON GRIFFITH: We're dealing with some experience. I mean, we weren't complete novices.

MS. HUNTER-GAULT: Did you have trouble convincing the big bankers that you were serious and that you knew what you were doing?

MARK WINSTON GRIFFITH: I don't think so. I mean, we're working with a new environment that people refer to as Community Reinvestment Act, you know, CRA, and I think that having been around long enough, Errol was working with one called the National Federation of Community Development Credit Unions, so they were, they were familiar with me and the work that I had done in, in the community, and so they knew we were serious, we represented a lot of different organizations. So by the time we, we began speaking with them, I, I don't think that some of the things you brought up like being "hip hop" and young, I don't think those things troubled them so much.

MS. HUNTER-GAULT: And having dreads.

MARK WINSTON GRIFFITH: Right, and had the dreads. That probably unsettled them a bit.

MS. HUNTER-GAULT: How did you know? Did they speak about it?

MARK WINSTON GRIFFITH: Of course not, much too tactful for that. I think that there was -- we didn't have to cajole them too much. I think there was a certain amount of goodwill on their side as well as this political environment I'm talking about, that they have to, by law, they have to reinvest in the community.

MS. HUNTER-GAULT: Who are you giving loans to? Have you started?

ERROL LOUIS: We just closed our first two. One was to a person who wants to improve her credit record, and what she did was what we call a credit builder loan. You deposit $500 say and then you borrow 500, and your savings are used as the collateral. It's a pretty simple transaction, but what it does enable the borrower todo is get into the habit of repaying on a regular schedule, and more importantly, we report that to the credit bureau, so that alongside a person's negative credit entries in that credit report, there'll suddenly be that this person repaid a $500 loan, as well as giving us some kind of feel for them. You see them come in and make the payment on time, and then the process of, of building credit begins. That was one loan. The other, which was for us real interesting was -- it's a young couple that's just getting started and the young brother is a physics, PH.D. candidate at an Ivy League institution and he needed a computer, not just any computer, but a fancy one with a powerful coprocessor chip, and he gave us this long list of articles he had published. We didn't even understand the titles of it. But we thought on balance it was better to have a physics PH.D., an applied physicist, with dread locks in Bed-Sty.

MS. HUNTER-GAULT: He had dread locks too?

ERROL LOUIS: In Bed-Sty.

MS. HUNTER-GAULT: That might have helped this guy.

MARK WINSTON GRIFFITH: Yeah, right.

ERROL LOUIS: That's exactly, that's exactly the point. Had he walked in with his dread locks into the local bank and said, I don't have a job, I want to explicitly take the time off so I can finish this dissertation, and I just need a real expensive computer so I can do my calculations, it's fair to say that he might not have gotten the same kind of hearing that he got with us.

MS. HUNTER-GAULT: I think that is fair to say. But let me ask you this. What gives you the confidence that you can trust people like this? I mean, your neighborhoods, as you've described them, have had institutions like the Bedford-Styvesant Restoration Corporation, which was heavily backed by the federal government in the '60s and '70s, and it fell on hard times both when the federal government took a lot of the money away that they had been supporting it with, but also because of, of people going, mortgage loans going bad, and things like this. Where do you get the confidence that you are going to reap success?

MARK WINSTON GRIFFITH: Well, we just work very closely with individuals, and that's how we see people, you know, as individuals, so that when people -- as members you establish a relationship with a credit union, unlike a bank where you go in and you're a customer because you're a part owner of the institution, you get to elect a board of directors, and you're, you're an integral part of an institution. And so the whole idea of a credit union is again, you establish that relationship, you're able to look at an application in a sort of 360 degree way. You, you know say the pastor, or you know where they go to school, where their kids go to school, and you're able to make judgments on their, on their applications that another bank wouldn't have the resources to and wouldn't have the inclination as well.

MS. HUNTER-GAULT: Mark, I also read somewhere that you said your background -- your West Indian background, a lot of the people in the community are West Indians.

MARK WINSTON GRIFFITH: Right.

MS. HUNTER-GAULT: But you referred to the values that you have as a result of this background. Tell me a little bit about that, and, and how that gives you the confidence in the people you're dealing with, many of them.

MARK WINSTON GRIFFITH: Yeah. Again, I think it's about working with people and living with people you feel comfortable with, and my family is from Jamaica, but my grandmother moved to Brooklyn sometime in the '50s, and my family, we've sort of been there ever since. So Ifeel very comfortable there. Errol's family is from Trinidad. So when someone comes into our credit union, and they have an accent, you know, we don't consider it an accent, so to speak. I mean, it's something that we feel, we feel comfortable with, and --

MS. HUNTER-GAULT: In other words, you're looking through a different prism?

MARK WINSTON GRIFFITH: Right, and I think that particularly West Indian culture you have things you call sous-sous, you have other types of financial cooperatives that they're very familiar with and have been using.

MS. HUNTER-GAULT: Yeah. Sous-sous, those are -- I know what they are but you can probably explain it quicker than I can.

MARK WINSTON GRIFFITH: Well, they're sort of lending circles, lending cooperatives.

MS. HUNTER-GAULT: Yeah. Where people informally put in two or three dollars --

MARK WINSTON GRIFFITH: Right.

MS. HUNTER-GAULT: And one week one gets to borrow, and the next week another one gets to borrow.

MARK WINSTON GRIFFITH: Exactly. So there's a long, strong tradition not only in the Caribbean but also going back too to Africa as well. So that is, is prominent, and I think that people warm up to the idea of a credit union naturally.

MS. HUNTER-GAULT: What would constitute success for you?

ERROL LOUIS: What would constitute success for us? We have already, I think, sort of achieved some success just by getting the institution open and educating as many people as we have. Success for me would be measured partly in dollars and in our case, I think it would probably be in the ten to fifty million dollar asset range. But beyond that, the bringing together of people is the definition of success. There are older people in the community. There are younger people. Right now, there's a serious division in the African-American community across that generational divide. To bring those people together -- some will be savers and some will be borrowers -- that will be success. There's a lot of rivalry and competition within the community among different islands from the Caribbean as well as with the native African-American communities, bringing all those folks together as well as finally making it a stable institution that can be turned over to the next generation of leadership. That's why we're spending so much time with young people. I never heard of a credit union until I was 21 years old. We're working with kids in high school and junior high school who are going to run their own youth credit union within a credit union and that's going to enable them to know how to run this institution, how to make it grow, how to make it revitalize the community, and I think they will go far beyond anything that we have done in the last few months.

MS. HUNTER-GAULT: Mark Griffith, your vision any different?

MARK WINSTON GRIFFITH: I won't say it's any different. I think - - what I think about -- how I think of success is if we were able to -- I mean, right now this being a hip hop credit union is sort of a novelty. People seem to trivialize it sometimes but I think that if people can really get sort of a sense of possibility from this, our motto is, "Make it happen," if they can come away from being a part of the credit union knowing that institutions like this are very possible and whether they be economic institutions or political institutions, that we do have the power to, as I say, reinvent ourselves, and I think whatever success comes about I think is going to be more intangible than tangible. It's going to be a psychological, I think, rebirth. That's what we're really looking for.

MS.HUNTER-GAULT: And you're in it for the long haul?

MARK WINSTON GRIFFITH: Yeah, we're in it for the long haul.

ERROL LOUIS: Definitely. We're planning for fifty to one hundred years of operation.

MS. HUNTER-GAULT: Well, as young as you are, you've got a long way to go. Mark Griffith, Errol Louis, thank you for joining us, and the best of success to you. ESSAY - A SINGULAR EXPERIENCE

MR. MacNeil: Finally tonight, essayist Anne Taylor Fleming has some thoughts about the advantages of an all girl school.

ANNE TAYLOR FLEMING: I started to notice articles like this one a couple of years ago. Suddenly they were everywhere, prompted in large part by this 1992 study by the American Association of University Women showing how American schools short-change girls. The academic world was still a male universe, they were all saying. Noisier and more assertive, boys dominated coed classrooms, called on more by teachers, encouraged more, they outpaced and outscored girls particularly in math and science. Back in the heady heyday of liberation, there was high hope that girls and women would get a fair shake. But these articles and studies were depressing corroboration of what you knew in your soul, that it hadn't quite worked out that way. You could certainly see it in the culture where the Andrew Dice Clays of the world were hell bent on demeaning women at every turn and in the corporate world where the glass ceiling was still very much in place. But the classroom? If girls weren't getting an equal shake there, then the battle was being lost at a far earlier age than we imagined, with repercussions not just for the girls but also for the country, whose workforce is now disproportionately female. So how could we save these girls, embolden them, make them frisky and full of achievement? One of the odd answers was a kind of reversal.

MALE TEACHER: And then we're going to do a series of six tests. The first two tests I put out for you here. You're going to test with the red and the blue litmus.

ANNE TAYLOR FLEMING: After 20 years of determined gender blending, of unisex clothing and coeducation, when the number of single sex schools fell by 50 percent, now came the call to look anew at girls' schools and women's colleges. Studies were showing that girls in single sex schools did better in math and science than their coed counterparts and that women from women's colleges were disproportionately represented in the United States Congress and the boardrooms of America, not to mention in the White House, something was going on. I thought I knew what it was because I had been there, in a girls' high school, this one to be exact in the foothills of West Los Angeles, the West Lake School for Girls. Not so long ago, I came back for a visit, alas not to the same school, which, in effect, had disappeared three years earlier, but a merger with Harvard boy's school. Here then was a perfect laboratory, girls who had been on a single sex campus and were now on this coed one. Had something changed, been lost in the transition?

FEMALE STUDENT: Yeah, all that, like self-confidence and feeling good about yourself, I think all comes from West Lake, because I haven't gotten any back from this school I know, and if anything, I've lost some of it at this school. And it just seems to -- it does -- it's hard to name exactly what that loss is because you just feel this great loss. Partly it's because I think we're becoming like the typical high school. We've got the guys, and they play football, and we've got the cheerleaders.

ANNE TAYLOR FLEMING: Listening to them was to be dragged back 30 years to a place I loved, a place that had emboldened me to do my best and not to muffle my voice, to compete with other women but keep them as friends. Indeed, that's what these girls spoke to, the unique support of a female only community, intensely competitive and yet somehow collegial at the same time.

SECOND FEMALE STUDENT: I think it's a really hard balance between going to single sex schools to find yourself and find pride in who you are and strength in speaking of up, and also being able to function in a normal society, you know, with boys and girls, not just only with girls.

THIRD FEMALE STUDENT: A lot of the girls are falling into the stereotypical roles of how they're supposed to behave and how they're supposed to act, and what they think of themselves as just inferior, and I just, I think that it really helps just having those, you know --

ANNE TAYLOR FLEMING: Obviously, the clock can't be turned back. In 1960, for example, there were 298 women's colleges. Now there are only 84. Just as obviously the young women at Harvard-West Lake are getting a terrific education. Still, there are pertinent lessons in what they say I think and in the experience of single sex schools. Some coed schools, like this one in Marin County above San Francisco certainly think so, and are now offering "girls only" math classes, and near where I live, emphatically non-elitist Santa Monica City College just became the first two-year public college to establish its own women's college, offering the routine subjects, English, history, astronomy, but with special attention to the classroom dynamic, making sure women are heard and to the syllabuses, making sure women are read. And in the Senate a handful of bills has been introduced aimed at eliminating gender bias in all of the nation's schools. It's crucial stuff, all of it, because we need our girls to be strong and competitive, not intimidated by anyone or anything. We need them spunky and alive and full of big dreams, not just for their sake but for everyone. I'm Anne Taylor Fleming. RECAP

MR. MacNeil: Again, the major story of this Monday, labor leaders disputed President Clinton's contention that they were using strong-arm lobbying tactics to kill the North American Free Trade Agreement. Vice President Gore will face off with NAFTA critic Ross Perot in a televised debate tomorrow. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you, and good night.