The NewsHour with Jim Lehrer

JIM LEHRER: Good evening, I'm Jim Lehrer. On the NewsHour tonight, the news of this Thursday, then the latest on recovering from the earthquake in Pakistan, including an interview with a top Pakistani official; a look at the many possible fallouts from climbing energy prices; China rising, Part Six, Paul Solman reports on the intellectual piracy dispute between China and the United States; and some thoughts about awarding the Nobel Prize for literature to British playwright Harold Pinter.

NEWS SUMMARY

JIM LEHRER: U.S. and Iraqi forces stepped up security today for Saturday's vote on the draft constitution. Soldiers put up concrete barriers outside polling stations and a dawn-to-dusk curfew took effect at nightfall.

But in Kirkuk, two Iraqi policemen died in a car bombing and a U.S. soldier was killed by a roadside bomb north of Baghdad.

A powerful Sunni group today urged Iraqis to vote against the constitution. The Association of Muslim Scholars said the charter would "fragment Iraq." Yesterday, lawmakers approved changes, hoping to gain Sunni support.

Iraqi prisoners were allowed to vote starting today. They're eligible if they have not yet been convicted of crimes. "Al-Qaida in Iraq" claimed today a highly publicized, captured letter is a fake. U.S. Intelligence officials said it was written by Osama bin Laden's second-in-command. It warned followers in Iraq against attacking civilians. But al-Qaida released a statement saying: "There is no truth to these claims, which are only based on the imagination of the politicians."

Earthquake survivors in Pakistan grew more desperate today as bad weather hampered rescue and relief efforts. Rain and snow fell in Pakistan's North West Frontier Province and across Pakistani Kashmir, the hardest hit regions. Landslides added to misery. Trucks loaded with aid were unable to reach villages because roads were blocked. The U.N.'s top relief official, Jan Egeland, warned time was running out for survivors.

JAN EGELAND: We had no roads in the beginning, with very little international presence, and I think it is going as well as it could the first week. But I fear we are losing the race against the clock in the small villages around these centers, which are now getting more and more assistance as we speak.

JIM LEHRER: The Saturday quake killed up to 40,000 people and injured thousands more. Today, an Islamic militant group in Kashmir coordinated a mass burial. Rescuers said there's little chance of finding anyone else alive in the rubble. We'll have more on the earthquake story later in the program.

Chechen fighters mounted a large-scale assault in southern Russia today. At least 49 people were killed in a town near the Chechen border. At least half were rebels. We have a report narrated by Lindsay Taylor of Independent Television News.

LINDSAY TAYLOR: An injured serviceman rushed to seek medical help -- terrified civilians running for their lives. There are wounded. And there are dead -- the result of the attack by Chechen fighters on police and army buildings in the town of Nal'chick. (Gunfire)

Russian forces attempted to throw a ring of steel around the town, by all accounts, under direct orders from President Putin himself to kill any rebel gunmen putting up resistance.

Russian Television pictures showed several men under arrest. But reports suggest as many as 150 Chechen rebels were involved in what's been described as a huge attack.

At one stage, the militants were said to have stormed a police station and taken hostages. They were later freed buts it's not clear how. What is clear is that there were widespread casualties, both civilian and military.

An eyewitness contacted by Channel 4 News describes seeing 14 bodies strewn in one area alone, both civilian and in uniform.

An Internet web site for Chechen rebels reported that a militant Muslim group said that it was behind the attack. It's thought to be linked to the Chechen warlord Shamil Basayev, who masterminded the first attack as well as the strings of other raids throughout the Caucuses.

Tonight, it was claimed that Basayev took part in today's attack and was killed. A Chechen newspaper reported being told this by a Russian security source. It's not the first time his death has been reported only for him to emerge alive. The attack on Nal'chik lasted for several hours, with pockets of fighting reported throughout the day. Latest pictures suggest normality returning to this battle-scarred town, as the Russian authorities claims on the number of dead and injured are being called in to question.

JIM LEHRER: Chechen rebels have been fighting Russian rule for more than a decade.

The European Union confirmed today that the bird flu has spread to the outskirts of Europe. Samples from western Turkey were the same virus that's killed 60 people in Asia since 2003. In Romania, authorities blocked off a village and sprayed disinfectants to control an outbreak there. Both countries slaughtered thousands of birds. Scientists have warned the virus could mutate and trigger a human pandemic.

British playwright Harold Pinter won the 2005 Nobel Prize for Literature today. He came to the fore in the 1950s and 1960s, with his breakthrough work, "The Caretaker". He also wrote "The Birthday Party" and "The Room", plus 26 other plays, as well as screenplays. Pinter's style relies on spare language and tense silence, and has influenced British and American playwrights.

We'll have more on his work later in the program tonight. Heavy rain triggered new flood warnings today in Connecticut, New Jersey and New York. Up to four-and-a-half inches of rain fell across the region in the last 48 hours. It sent rivers and streams over roadways and caused travel delays. The region was already saturated from downpours last weekend.

There were new measures today of U.S. economic damage from last month's hurricanes. The Energy Department reported oil production in September was the lowest since World War II. And the Labor Department counted another 75,000 jobs lost last week, due to the storms. That makes nearly 440,000 jobs wiped out since Hurricane Katrina.

On Wall Street today, the Dow Jones Industrial Average lost a fraction of a point to close at 10,216. The NASDAQ rose more than nine points to close at 2,047. And that's it for the News Summary tonight. Now it's on to: The Pakistan response; the energy fallouts; Chinese piracy; and Harold Pinter, Nobel laureate.

UPDATE SHATTERED REGION

JIM LEHRER: The Pakistan rescue and aid effort. We start with a report from Bill Neely of Independent Television News. He's in a town in the northwest frontier province still pleading for help.

BILL NEELY: Noise and terror today for the children who have waited so long for this, their rescue, but they hated it. This boy, injured from head to the one foot he has left, his wounds septic. (Moaning) Their mothers could be no comfort, all of them traumatized by a huge aftershock overnight, but at least they were out -- lining up to pull them out, dozens of foreign helicopters, mostly American, fresh from fighting militants in neighboring Afghanistan.

I went with them today, deep into the mountains where the U.N. says rescuers are losing the race to reach dying victims. Six days on and some towns have seen no aid -- the sight of mass destruction imprinted on the eyes of everyone.

The Pakistan government sent no one here -- too remote, they said, too difficult. Furious people have to be held back at gunpoint today, but their fury has a cause: Badly injured children, clinging to life and little food or liquid until now. Fathers who carried sons for miles only got help for them today.

It has been a long, long wait. Some of the injured who came here to be rescued didn't survive. The air crews say others don't survive the flight out. It is, even after six days, a brutal battle to live.

They have left behind ghost towns; from the mosque to the center they lie abandoned, bodies in the rubble. Pakistan's army is nearby but has done little. The country's prime minister conceded to me today more should have been done.

SHAUKAT AZIZ: The people are correct that it took a while. But now we have realized why it took awhile, because there was no access, no logistics, nothing on the ground. Everything has to be flown in. That has limitations.

BILL NEELY: Prime Minister, the people we've spoken to are very angry that your aid was too late.

SHAUKAT AZIZ: We have done the best with the available resources. Now international resources have come, we'll do even better.

BILL NEELY: Dozens more American helicopters are promised. Some crews have come straight from a very different disaster.

LT. ERICK SACKS: Quite a few of our team members that are here came directly from Hurricane Katrina. They had a few days at home, but then they came right out to Pakistan to help out here.

BILL NEELY: And they are helping, there's no question. But with two million homeless and a million in dire need of the very basics of life, help is vital. Nothing, though, can quite erase the pain and the deep sadness here.

JIM LEHRER: And now more on Pakistan's response to the quake disaster; Ray Suarez has that story.

RAY SUAREZ: And for that response, we turn to Munir Akram, Pakistan's ambassador to the United Nations.

Mr. Ambassador, welcome. As you just heard in our report, the correspondent was visiting places where still no Pakistan government aid has been offered on day six since the quake. Why did that happen?

MUNIR AKRAM: I think you have to appreciate that the area that has been devastated is about 1,000 square miles of territory, which is mountainous and inaccessible in the best of times. With this earthquake and the roads having been broken down by the earthquake, the only way in was through helicopters. Pakistan had only 35 helicopters.

We appealed for helicopters, and we have been getting them slowly, but we have been -- we have had to prioritize. We've had to go to the areas with the largest population centers, the most injured were, and obviously this has been a long and arduous effort. Help has been coming in. As we have access, we've rebuilt the roads.

We've got to the main towns now. But still the remote villages, the roads are still broken. We can only get there by air. The helicopter capacity is limited even with the international assistance. So we're getting there as soon as we can, but one has to appreciate that the area is huge; the number of people involved are enormous. And, therefore, they will always of course be people who we have not got to, but this is not for lack of will. It is a lack of capability

RAY SUAREZ: Was it also, sir, from a lack of planning? Many reports from the region say that what roads there are were jammed with private vehicles, that people who had waited for a government response finally took things into their own hands and when the army arrived, the roads were already impassable.

MUNIR AKRAM: No. It is I think not -- who can plan for an event like this? By definition an emergency is something which is not fully planned for. And for a country like Pakistan, it is a country with limited capacity, both financial and technical. Therefore, I think that people, of course the people of Pakistan have responded generally is. Individuals have contributed.

It is not because they found the army lacking or the government lacking; it is because people wanted to help. And Pakistanis have responded very generously at the private level, and that is most welcome, but the army too has moved very fast.

As soon as we realized the extent of the disaster, the civilian government has been mobilized. We are doing all we can, and it is my view that it is necessary to function, to focus on what needs to be done rather than to focus on what should have been done.

RAY SUAREZ: Well, let me give you one last question about what should have been done. Does the country have a civil defense plan for a disaster like this one? It's long been known that Pakistan sits on a fault line, a seismically active part of the world that earthquakes are a possibility.

MUNIR AKRAM: Yes, of course. We do have a civil defense plan. We have a civil defense organization. But it takes time to mobilize all resources and assets, and nobody planned for a quake of this magnitude, of this extent and the scope, which has been unheard of and has been unprecedented. We haven't had something like this for 100 years.

I think the best of planning is required, but we have to now respond to the situation we face. It's a desperate situation. Pakistan needs help, support and sympathy, rather than gratuitous criticism.

RAY SUAREZ: What kind of help do you need, and are you getting it?

MUNIR AKRAM: Well, we need, first of all, winterized tents, medicines, water purification and support in terms of access -- that is helicopters. And we have been asking for that. The United Nations has issued a flash appeal for $272 million.

We have also appealed. And we are getting commitments from friendly governments. We hope that these will be acted upon as soon as possible and that the international community will mobilize to help Pakistan face this unprecedented disaster that has occurred in this part of the world.

RAY SUAREZ: What is middle October like in that mountainous region in the northern part of your country?

MUNIR AKRAM: Well, I think the days when there was sunshine, the days are variable. At night it gets very cold. As your program has reported, the first snows of the year have already fallen. There is rain and clouds sometimes making it even more difficult to reach inaccessible villages by air.

Therefore, it is -- the climate also adds to the misery of the people and adds to the difficulties in getting to the people.

RAY SUAREZ: Is there now a system in place -- you mentioned that it does take time to get these things in order, so that your government is aware of where need is greatest, where people haven't yet gotten, for instance, medicine, liquids, food?

MUNIR AKRAM: I think we have established a national commission, which is coordinating efforts. We have reconnoitered the territory and the area with the help of our friends. And we are now in a much better position to know where to go, but still it's a question of capability. It's a question of access and it's a question of availability of all the necessary supplies that we need in terms of tents, of medicines, of food and other supplies that we need to get to the people.

We need to get those who may be injured out and into some medical treatment. So there is we are working round the clock without sleep, without let-up. And we need all the assistance and help from the international community that we can get.

RAY SUAREZ: This place in Asia, it's a part of your country where several countries converge at one spot, but these are often neighbors with which Pakistan has had tense, even war-like relations. Is aid flowing across these international borders? Are the people of your country getting help from perhaps new and unusual sources?

MUNIR AKRAM: Well, I think we have good relations with all our neighbors except one -- China, Afghanistan even, yes with India we've had difficult relations, although these are improving. India has offered help, and we have accepted it. And we are getting some supplies from India, as well as from other neighbors and from other members of the international community, particularly the United States, the United Kingdom, Japan and other friends who are contributing, and we are most grateful for the support that has been extended by all our friends and all our neighbors.

RAY SUAREZ: In the case of aid from India, was it difficult to accept? Did ground rules have to be set in place before you could take aid from a country with such a tense border with yours?

MUNIR AKRAM: Well, of course there are sensitivities involved, but the prime minister of India phoned our president, and the president readily accepted the assistance, and it has been transported across the established points of our border, and that aid has come in, and we are grateful for that assistance.

RAY SUAREZ: Is private and nongovernmental aid coming from other parts of the world, and can people who make contributions be assured that there is now sort of an open flow and a governing intelligence so that the money gets where it's needed and helps people who need help?

MUNIR AKRAM: I think that everything is open now. All the assistance that's coming in, all the international presence is there. What we're getting we're trying to get to the people with the help of the international community and our friends. There is no question that the aid we get will not get to the people. It will get to the people. That's what it's meant for. This is a natural disaster for Pakistan, and we should. -- we are acting with the best of our ability to try and meet the needs of our people and to ensure that their suffering can come to an end.

RAY SUAREZ: Ambassador Munir Akram, thanks for being with us.

MUNIR AKRAM: Thank you.

JIM LEHRER: Still to come on the NewsHour tonight: The many effects of rising energy prices; idea piracy in China; and the Nobel Prize for Pinter.

FOCUS ENERGY DOMINOES

JIM LEHRER: Margaret Warner has our energy story.

MARGARET WARNER: With winter fast approaching, many Americans are facing the prospect of dramatically higher heating bills. That was the bad news reported yesterday by the Energy Department's Energy Information Administration.

GUY CARUSO: We're expecting about a one- third increase in heating fuel expenditures in this country this winter compared with last winter.

MARGARET WARNER: The burden will fall unevenly, depending on what kind of heating fuel a household uses. The number one source of heating fuel in this country is natural gas. And the 55 percent of U.S. households using it will be hit the hardest. The price of natural gas is expected to jump 48 percent. That means another $350 to the winter heating bill for the average household.

Electric heat is the second most popular, and the 29 percent of American households that use it will get off the lightest. Electricity prices are expected to rise just 5 percent for an average of $38 over last winter's bills.

The much smaller group of homeowners who use heating oil, just 7 percent of Americans, face a sharp 32 percent increase, or an average of $378 more.

And bills for the 4 percent of homes that use propane will spike 30 percent, or roughly $325.

The higher prices were blamed on tight supplies, badly exacerbated by the damage to oil rigs and refineries caused by Hurricanes Katrina and Rita. The poor and elderly people on fixed incomes, like 83-year-old Chicago resident Lillian Drummond, are likely to suffer most.

LILLIAN DRUMMOND: I can hardly pay for the gas bill now, including electricity, too. They've gone up so high, and if they go up anymore, I don't know what we'll do

MARGARET WARNER: The federal government and many states do provide some heating assistance for low-income households.

And for more on the expected impact of these higher heating costs, we're joined by Tom Wallin, president of Energy Intelligence, an information services company that produces data, news, and analysis about global energy issues -- it also publishes leading industry journals like Oil Daily; and Kara Saul Rinaldi, an economist and policy director at the Alliance to Save Energy, a bipartisan group that promotes energy efficiency. Welcome to you both.

Tom Wallin, why in a nutshell are we going to see this abrupt increase in prices? How much of this is the hurricanes?

TOM WALLIN: Well, it is primarily the hurricanes. I mean, what's happened here is we've lost a big chunk of our supply of oil and gas and refined products, and that means we're not building up the kind of inventories for the winter that we normally would.

And in addition, these storms are having a lasting impact on supply, and we're not going to have the kind of supplies this winter, our domestic production is going to be lower, so we're going to have to draw harder on these inventories. That's the immediate reason.

But there is a bigger cause here that lies behind all of this, and this is the fact that our global supply system has really been stretched to its limits for some time now. And so when you have a crisis like these storms, you have some kind of a disruption, it has a big impact on prices. There's still that vulnerability remaining. And so if there is some other crisis or problem in the world petroleum market this winter, the prices will go higher than the Energy Department is even saying.

MARGARET WARNER: And briefly because I want to get to Ms. Rinaldi, but why are we seeing a difference in different kinds of fuel? For instance, why is natural gas, which more than half of all Americans use, significantly higher than say home heating oil?

TOM WALLIN: Well, I think a big reason for that is that there are just fewer import sources we can draw on, and, unlike petroleum, where we have a strategic reserve, we have no strategic reserve for natural gas. There's increased exposure there and less to fall back on.

MARGARET WARNER: Kara Rinaldi, one other explanation. Why on the other end will electricity not go up more than 5 percent? Don't these electricities use other fuels to generate electricity?

KARA SAUL RINALDI: Well, that's just it. They have coal and nuclear and power, and those aren't spiking the way natural gas and oil are, so that's why we're seeing those spikes. These are imported sources.

MARGARET WARNER: Which parts of the country... consumers in which parts of the country can expect to see the biggest hit, feel the biggest hit?

KARA SAUL RINALDI: Well, for natural gas it will be a large hit in the Midwest, and for home heating oil, that's primarily used in the Northeast.

MARGARET WARNER: What would you add to that, Mr. Wallin, in terms of the regional impact and how different it will be?

TOM WALLIN: Yeah. I think that is true. Natural gas really is used across the country. It's in the West, it's in the mid-Atlantic states, too. The East... the Northeast can draw on imports, of course, so that is a factor that alleviates the situation.

MARGARET WARNER: And propane, is that mostly rural?

TOM WALLIN: That's mostly rural, also in the Southeast.

MARGARET WARNER: You mean non-rural, but just in the southeast?

TOM WALLIN: Yeah, well, in the Southeast, in Florida, for example.

MARGARET WARNER: Ms. Rinaldi, it seems obvious that the people on low incomes are going to feel the impact the most, but explain more why that is. Is it just that they don't have a financial cushion, or are there other factors?

KARA SAUL RINALDI: Well, unfortunately, the low- income families usually are the hardest-hit by price spikes such as these primarily because they don't have a disposable income that they're not choosing between whether or not to go out the dinner or to buy an additional movie. They're choosing between what their necessities are, and, therefore, they just basically don't have the money there to be able to reach into and to dip into to meet the higher energy bills.

But another point is that they simply don't have the ability to change out their furnaces or to upgrade their windows and to install new appliances and new systems that will help not only this winter but in winters to come. They are stuck in a home which is owned by someone else or, whether it's a subsidized housing or whether they're renting from a landlord.

That's why we need building codes and standards to be put into place that will ensure that the next time the home is built, the next time they need to change out a furnace, it is built to a higher energy efficiency code.

MARGARET WARNER: Now, there are, as we mentioned in the setup piece, federal and state heating assistance programs. Are they automatically pegged to a rise -- an increase in the price of fuel, so that they'll still be covered, or is something else going to have to be done?

KARA SAUL RINALDI: Well, we're definitely going to need for the president and for Congress to put more money into the LIHEAP and Weatherization budgets to help offset these price increases.

MARGARET WARNER: And another question for you on impact: What about middle- income people who have recently bought, you know, one of these new kind of super-sized house, now are they also in for a rude shock, or are these new homes, more upscale homes built much more efficiently?

KARA SAUL RINALDI: Well, it really depends on what state as to what code they're built to, whether they're built to a high code which ensures there is enough insulation, that their windows were double-paned and energy star, that they had a high-efficiency furnace. If that's the case, then they're in pretty good shape.

Of course, the bigger the home, the more space to heat. But if it's a tight home and it's well-sealed, well-insulated, then they're in better shape to combat a really cold winter.

Of course, some people building similar homes that look the same but don't have all of that energy efficiency, and they're going to need to look into upgrading and getting the payback on their utility bills.

MARGARET WARNER: Tom Wallin, talk to us now about the impact on business. How widely will the impact be felt on businesses, and which businesses, in particular?

TOM WALLIN: Well, I think that the heating costs are going to be felt by all businesses, but the impact across different industries is not homogeneous at all.

You certainly have certain sectors that rely particularly on natural gas, for example, petrochemicals or fertilizer manufactures or just automobile manufacturing, and those kinds of sectors are going to be hit harder. And other sectors, like the oil industry obviously, is going to see much higher profits.

MARGARET WARNER: And will the increases -- let's just take an average business, let's say Wal-Mart, which has huge warehouses to heat or Amazon or people with just huge spaces to heat, are the heating costs enough of their business that it's going to have a ripple effect, and that ultimately consumers will feel it in higher price for goods and services?

TOM WALLIN: I think it's less of a factor for those retailers than, say, the higher transportation costs that they're already facing in terms of gasoline and diesel. And to the extent those higher transportation costs persist, those are the costs that are more likely to be pushed through, but even those costs are harder to push through in terms of higher prices, I think.

MARGARET WARNER: And what about building costs?

TOM WALLIN: Yeah, I mean, materials for manufacturing, lumber, that sort of thing, those are heavily dependent on transportation fuels, again.

MARGARET WARNER: So Kara Rinaldi, when will people really feel this? When are they going to open a bill and really get their first jolt?

KARA SAUL RINALDI: Well, it's going to depend a lot on our weather. As soon as it gets very cold and people start turning on those heaters, that's -- the following month when they get their bill, that's when they're going to be feeling it.

So it's time for consumers to start looking right now at ways of increasing their energy efficiency and that's what we need to see them do.

MARGARET WARNER: All right. So on the assumption that perhaps they can't even go out and buy new windows now and they probably aren't going to go buy a new house, what can consumers, what can homeowners do to cushion the blow?

KARA SAUL RINALDI: Well, in the short term, there are some easy things that a consumer can do. They can install a programmable thermostat, which is a marginal cost. But in that way they can make sure when they leave the house their thermostat drops a little bit. So they're not keeping it warm and toasty the entire day. And then it's all ready for them when they come back. So they're reducing their energy use while they're outside the home. They can insulate their water heaters. They can install new insulation. Insulation is one of the quickest and easiest ways, by just rolling that out in the attic, making sure their ducts are also well-sealed, their crawl spaces are filled with insulation and just checking to plug all the leaks in your home.

If you look at all the different... if you add up all the leaks in your home, it can be like having a three-foot-by- three-foot hole in your wall. So you need to just make sure you plug all of those infiltrations.

MARGARET WARNER: All right, Kara Rinaldi, Tom Wallin, thank you both.

TOM WALLIN: You're welcome.

KARA SAUL RINALDI: Thank you.

SERIES CHINA RISING

JIM LEHRER: Now, part six in our series on the Chinese economy. Tonight, a key area of conflict between China and the United States: Intellectual piracy. Again, NewsHour economics correspondent, Paul Solman of WGBH-Boston reports.

PAUL SOLMAN: Piracy of intellectual property is everywhere in China. Some logos like the Lacoste alligator even come in multiple knockoffs. On the street, the pirates come to you, selling the hottest DVD's, for instance, at $1 to $2 each -- bootleg designer watches at an even greater discount.

PAUL SOLMAN: Rolex?

SPOKESPERSON: Yeah.

PAUL SOLMAN: How much are those? The answer, $12 apiece, not a bad starting piece for an item that retails for thousands. So maybe these weren't actual Rolexes any more than these were the real McCoys, these copyrighted originals, this authentication of a designer wallet authentic. As former Wall Street Journal Beijing Bureau Chief James McGregor puts it --

JIM McGREGOR: You can buy Calloway golf clubs here for the price of hordeurves. I mean, come on, I can walk you down the street to a five places to buy fake Callowways that are just like real or to buy DVD's and movies or any product.

PAUL SOLMAN: But so what? Why are intellectual property rights -- IPR -- such a bone of contention between the first world and China? Well, for starters, Chinese fakes cost western companies billions of dollars a year in lost revenue and aren't just peddled on the streets of Beijing, but just about everywhere, including the sidewalks of New York.

ANDREW OBERFELDT: That's the original like watch for the Navy Seals of Italy. It goes for around $7,000.

PAUL SOLMAN: Many of the fakes here, says ex-New York cop Andrew Oberfeldt, now a private investigator, are made in China. So they're especially easy to find in New York's Chinatown, if not that easy to shoot.

That's because intellectual property theft is a crime in the U.S., usually ignored in China.

(VENDOR COVERING CAMERA LENS)

ANDREW OBERFELDT: They don't really care whether it's the news or law enforcement or which division of law enforcement or private eyes, they just know that something is up and the alarm goes up and down the street.

PAUL SOLMAN: Now, in an advanced economy like ours, "intellectual property" is all-important. It's what Americans have to sell to the rest of the world: The ideas we copyright, the inventions we patent, the brands we create. And it's not just designer accessories or Hollywood films.

Drug companies, for instance, invest billions in research and development, and in safety, as here at Pfizer's plant in Dalian, China. That's why exclusive patents are granted on drugs, the world over: To give companies time for a payoff on their investments, and thus an incentive to make them. And at the center of the most important IPR case in China is the product Pfizer's invested in here: Viagra, the sex drug.

Now, China doesn't allow any chemicals, including the active ingredient in a drug, to be patented. Instead, it requires patent applications to specify what a product promises to do. You wouldn't think that'd be too tough in the case of Viagra, which is already used so widely in China it's been given to pandas to arouse them in captivity. But the government made the rules more stringent after Pfizer had filed, then rejected Pfizer's application.

GEORGE EVANS: They moved the goal posts.

PAUL SOLMAN: Pfizer Lawyer George Evans.

GEORGE EVANS: There's a standard that's well-accepted throughout the world. We think we met that standard. Certainly, it was enough in the U.S., It was enough in Japan and all of a sudden, after the rules were changed, it wasn't enough in China.

PAUL SOLMAN: Pfizer is appealing; a dozen or more Chinese companies are waiting for the verdict. If the appeal is denied, they'll be able to sell Viagra, Wei-ge in Chinese, indistinguishable from the original. It turns out some companies are already doing just that.

With an American who works for Chinese TV, David Moser, as our guide, we went on a Viagra- buying expedition in Beijing. A good bet, we were told: A sex shop called the G-Spot.

PAUL SOLMAN: Viagra?

DAVID MOSER INTERPRETING: She says it sells very well and it's very effective.

PAUL SOLMAN: Also selling well, an herbal look-alike.

DAVID MOSER: Here we have the same blue pill, the same shape, but this is a different name.

PAUL SOLMAN: We also bought some Viagra in a shopping mall pharmacy. We even tried a traditional Chinese medicine vendor. But here, they specialize in natural ingredients: Herbs, mostly, but also pickled sea horse, to be stewed for a potency potion, and some other items we'll leave unnamed.

Back at Pfizer's Dalian plant, we presented the G-Spot's Viagra to Pfizer's Dr. Gao Jifu.

GAO JIFU: It's difficult for me to judge and we at Pfizer we have a group we call global security.

PAUL SOLMAN: And what about the very Viagra-looking herbal knock-offs?

GAO JIFU: It say that these consist of five major Chinese medicines. Herbs and, and also you know some animal organs.

PAUL SOLMAN: Some animal organs?

GAO JIFU: Animal organs and the herbs.

PAUL SOLMAN: The same ingredients, it so happens, that we got at the traditional Chinese medicine establishment, which Dr. Gao himself, as it happens, actually prefers.

GAO JIFU: Because this cure you from you know, make your body stronger and not just for one function.

JIM McGREGOR: Pfizer is even a little more complicated because the Chinese think that that line of business is theirs. I mean, the Chinese have been studying the ultimate aphrodisiac for 2,000 years. They've been eating deer horn and beetle feet so when Viagra came in here, they kind of said, this is our line of work.

PAUL SOLMAN: If the Chinese don't genuflect to western medicine, you can see why they might not fully buy the concept of intellectual property.' All private property was banned in China for decades under communism. For centuries before that, all ideas were owned by the state and China came up with so many of the world's great inventions without the help of patent protection at all.

RICHARD CHENG: For example, the compass. Tell the direction of south and north.

PAUL SOLMAN: The compass?

RICHARD CHENG: The compass.

PAUL SOLMAN: Richard Cheng runs the country's biggest microchip firm.

RICHARD CHENG: Gunpowder.

PAUL SOLMAN: Gunpowder, yeah.

RICHARD CHENG: And even the way of making papers. And also China invented the textile industry like silk and this kind of thing.

PAUL SOLMAN: Pfizer world headquarters back in New York where we've arranged for our Chinese Viagra samples to be tested. We get to discuss the result with Pfizer's head of global security, ex-FBI Agent John Theriault.

JOHN THERIAULT: We look at China the same way the DEA might look at Colombia, as a source country for illicit drugs.

PAUL SOLMAN: First, the package from the department store pharmacy, one tablet that cost 20 bucks. It turned out to be genuine Viagra, made by Pfizer. The G-Spot's Viagra? Counterfeit -- something we might have known had we bothered to read the fine print. But though it was phony, the G-Spot's Viagra wasn't exactly a dud. It contained the same active ingredient that gives Viagra its oomph, sildenafil citrate; as to our amazement did the herbal look-a-like.

So if all of these might actually work, why shouldn't a consumer buy the cheapest one?

JOHN THERIAULT: First of all, you have no idea of the conditions under which it was manufactured, who's handled it, whether it works or not, you have no recourse if there's something wrong with the product, who do you go to?

PAUL SOLMAN: Pfizer has raided counterfeit drug labs in Asia where toxic ingredients were mixed in less than hygienic ways.

JOHN THERIAULT: We're talking about medicines right now. There is a huge market in counterfeit engine parts, counterfeit automobile parts. Do you want to be in an airliner with counterfeit parts that go bad at 35,000 feet, or in a car whose brakes fail when you're traveling down the freeway at 70 miles an hour? I don't think so.

PAUL SOLMAN: Having done his darndest to frighten us away from counterfeit pharmaceuticals and nearly all forms of transportation, Theriault then made the economic case.

JOHN THERIAULT: When we're talking about a knowledge economy and we're talking about knowledge jobs being based in the United States, buying counterfeit products destroys the incentive for companies to do the research and development to discover and market the cures of the future.

PAUL SOLMAN: So, why aren't the Chinese government doing anything about it? Communist Party official Cheng Siwei says that, actually, they are.

CHENG SIWEI: We are very serious to provide intellectual property's protection. You know, we have our laws, patent laws, trademark laws, and copyright laws.

PAUL SOLMAN: And many agree China is getting more serious about IPR, but, says Emory Williams, president of the American Chamber of Commerce in Beijing, only when China's got a stake in the outcome.

EMORY WILLIAMS: One thing you certainly won't see in the markets, as an example, is counterfeit items with the Chinese Olympic logo on it. So it's very clear that when people understand that there are penalties, that things can be stopped.

PAUL SOLMAN: With so much riding on the 2008 Olympics. China's showing it can enforce intellectual property laws if it's China's property. In fact, Chinese companies with something to protect, like the one that sells the technology of Tsinghua University, are also pressing for protection.

RONG YONGLIN, Chairman Tsinghua Tongfang (Translated): Many companies either pretend they are Tsinghua-related or steal some basic technology from us, develop it and then claim they're working with our technology. We've set up an office to protect our copyrights and intellectual property.

PAUL SOLMAN: That's what companies do in an advanced economy, which China has to become.

GEORGE EVANS: You can only be the low-cost producer for so long. Then there's going to be somebody else that's the low-cost producer and the only way that you're going to be able to compete then is by innovating and relying on intellectual property to protect that innovation.

PAUL SOLMAN: But since U.S. firms can't yet rely on protection in China, some are trying a different strategy cutting price. Wal-Mart Asia's Joe Hatfield.

JOE HATFIELD: You're looking at 22 Renminbi --21.90.

PAUL SOLMAN: That's less than $3.

JOE HATFIELD: Yes. $2.50.

PAUL SOLMAN: Bringing us right back where we started: The hottest DVD's at a couple of bucks each down near what they cost on the street, suggesting that, like so many other suggesting that, like so many other vestiges of underdevelopment in China piracy's very best days may be behind it.

JIM LEHRER: You can go to the Online NewsHour at pbs.org for more on Paul's series or even sign up for a pod cast that automatically downloads audio versions.

FOCUS LITERARY LAUREATE

JIM LEHRER: And finally tonight, the Nobel Prize for literature. We begin with a report from Emily Reuben of Independent Television News.

EMILY REUBEN: Harold Pinter has been writing for 50 years, author 29 plays and more than a dozen screen plays. His voice cracked from a long struggle with cancer of the esophagus, the man who's made his life from words, for once had few to say.

HAROLD PINTER: I'm speechless. And I'll remain speechless. But I'll have to stop being speechless when I get to Stockholm apparently because I have to make a speech, which is going to take a great deal of thought on my part.

ACTOR: I'm talking to you! Where is --

EMILY REUBEN: His early plays like "The Homecoming" were initially shocking. Today, the Nobel Prize judges praised him for restoring theater to its basic elements.

SCENE FROM PLAY

EMILY REUBEN: Reporter: When it first opened, The Birthday Party' closed after just four days. Yet by the time of this television version, his mastery of minimal language yet dense emotion won Pinter huge audiences.

ACTOR: You read that -- yesterday.

ACTOR: Well, I haven't finished this one yet.

DAVID HARE, Playwright: He's unusual among British playwrights in that there was this extraordinary decade in which not only he wrote The Birthday Party,' he wrote The Homecoming,' and he wrote The Caretaker,' but at the same time he was writing two of the most perfect screenplays, you know, for Joseph Losey's film, of The Servant,' an accident, and it's hard to think of anyone actually that you can say is equally adept in both media, and he managed to do all that in the space of ten years. It's a most extraordinary, phenomenal output at that period.

EMILY REUBEN: Reporter: And Harold Pinter is a huge figure on the political stage too. Campaigning for years against war, most recently the campaign in Iraq.

HAROLD PINTER: The United States is a monster out of control.

EMILY REUBEN: He has always been incredibly involved in his art, acting here in "The One for the Road." The themes of his plays sometimes curious as his private life, one work, "The Betrayal" thought to be based on an affair with the broadcaster Joan Bakewell.

Tonight Harold Pinter's said to be drinking champagne with his wife and friends, the biggest prize in literature won just two days after his 75th birthday.

JIM LEHRER: And to Jeffrey Brown.

JEFFREY BROWN: Harold Pinter is the rare writer whose very name has entered the language in the form of the adjective "Pinteresque."

Joining me to explain that and discuss Pinter's work is Ben Brantley, chief theater critic for the New York Times.

So Ben Brantley, for those who may not have seen a Pinter play, what makes it "Pinteresque?"

BEN BRANTLEY: I think Pinter's own phrase is "comedy of menace;" there's a sense that something unspecified often but very dangerous is lurking. Pinter once used the phrase "the weasel under the cocktail cabinet," but that sense of danger I think is also located in the people. There's always a sense of struggle for power within Pinter and also a struggle to define themselves against the anxieties of this strange world through which they float.

It's given voice not only in the repetition of simple words, which acquire different weights as the plays go on, but also in the silences in Pinter's trademark pauses.

JEFFREY BROWN: Speaking of the silences, I was reading his play "the Homecoming" today, and it is striking how often the word "pause" is written into the directions in the play.

BEN BRANTLEY: He once said he regretted having ever introduced pause into the stage directions, that he thought it made people self-conscious, but it's certainly essential and it's hard for actors to get it right. I think it's rare, especially in this country, that you see an ideally-produced Pinter play.

JEFFREY BROWN: Well, let's hear some of that Pinter dialogue. We have a short clip from the film version of his play "Betrayal." Here's Jeremy Irons and Ben Kingsley as two parts of a love triangle.

ACTOR ONE: Good of you to come.

ACTOR TWO: Not at all.

ACTOR ONE: Please sit down.

ACTOR TWO: Well, I might, yes, in a minute.

ACTOR ONE: Julie's at office on night duty.

ACTOR TWO: Ah. Speak.

ACTOR ONE: Yes.

ACTOR TWO: You look quite rough. What's the trouble? It's not about you and Anne Marie, is it? I know all about that.

ACTOR ONE: Yes, so I've been told.

ACTOR TWO: Ah. Well, it's not very important, it is?

ACTOR ONE: It is important.

ACTOR TWO: Really? Why?

JEFFREY BROWN: So in those silence and pauses, a lot of meaning is conveyed.

BEN BRANTLEY: Oh, yes. You can actually hear the wheels of power shifting, the balance of power moving sort of tectonically from one man to another within as each wonders what does the other know.

JEFFREY BROWN: What were Pinter's influences? Where did he come out of?

BEN BRANTLEY: Well, I think he's very much the fullest grown child of Samuel Beckett, who created... didn't create but probably was the great English and French-speaking practitioner of the Theater of the Absurd.

As in Pinter in Beckett you have a sense of man at odds with the universe. The difference is that Pinter takes it from the sort of abstract cosmic settings or metaphoric or poetic settings and puts it in everyday life, so that kind of cosmic fear becomes a part of daily existence. It's doubly scary.

JEFFREY BROWN: And in turn, what were -- how did he influence writers of his generation and those of the next generation?

BEN BRANTLEY: I think so many playwrights today -- I was on -- I was in London for a few weeks to see plays a year ago, and I was amazed. They were reviving "Betrayal" at that time. And I was amazed how many playwrights, and playwrights you don't think of at all as being at all "Pinteresque" like Michael Frayn, who wrote "Democracy," and Noises Off,' and Copenhagen,' a verbose playwright, were nonetheless shaped by that landscape of ambiguity that Pinter created, the sense that we can't really know another person and in fact we can't really know ourselves.

David Mamet in the states I think certainly has picked up on the more wrathish elements of Pinter dialogue and the way people use words as weapons to get at one another.

JEFFREY BROWN: What about Pinter the man as we saw in the setup? He's become a very outspoken figure in politics.

BEN BRANTLEY: He has indeed. I think -- and he said this too -- that his plays in a sense were always political, and they were about one person trying to assert or battle a struggle for dominance. I think he wound up translating that more and more specifically into plays like "One for the Road," in which I saw him portray an interrogator from a totalitarian regime. Harold Pinter doing Harold Pinter menace is something to witness.

JEFFREY BROWN: So when you think about his legacy, is it in terms of the writing, is it in terms of the themes?

BEN BRANTLEY: I think many people have addressed the same themes that Harold Pinter has, but what's so extraordinary about him is the way he translated those themes into the form.

I can't see a Pinter play if it's even passably well-acted without leaving and finding that I've been infected by it, that the rhythms of my thought are the rhythms of Pinter, often for three hours or even a day later.

He expresses anxiety and not just individual anxiety or personal anxiety but a social anxiety I think we all share in the 21st Century through his very rhythms of language and what people say and particularly what people don't say.

JEFFREY BROWN: Do you have a favorite Pinter play, one that you'd direct people to?

BEN BRANTLEY: Oh, I love "The Homecoming" in which a wife is introduced into a clan of men, and little by little let's say insinuates her way into their lives.

The shift in power in is that and sort of the feeding of power by the old men, as strange and I think objectionable, a lot of people found it when it first came out in its sexuality, as strike as all that, is I think anyone who goes home after a long period away will identify with it.

JEFFREY BROWN: Okay, Ben Brantley, of the New York Times, thanks very much.

BEN BRANTLEY: Thank you.

RECAP

JIM LEHRER: Again, the other major developments of this day: U.S. and Iraqi forces stepped up security ahead of Saturday's vote on the draft constitution.

The head of U.N. relief efforts warned time is running out to get food and medicine to earthquake survivors in Pakistan. And Chechen fighters assaulted a town in southern Russia. Late reports put the death toll at 85. We'll see you online and again here tomorrow evening with Mark Shields and David Brooks, among others. I'm Jim Lehrer. Thank you and good night.