PBS NewsHour; January 20, 2011 3:00pm-4:00pm PST

Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS

>> Lehrer: GOOD EVENING. I'M JIM LEHRER. CHINESE PRESIDENT HU CALLED FOR CLOSER COOPERATION WITH THE UNITED STATES AND WORKING TOGETHER TOWARD A GLOBAL ECONOMIC RECOVERY.

>> Woodruff: AND I'M JUDY WOODRUFF. ON THE "NEWSHOUR" TONIGHT, WE ASSESS THE PROSPECTS FOR PARTNERSHIP AND THE ECONOMIC TENSIONS THAT DIVIDE THE TWO SUPERPOWERS.

>> Lehrer: THEN, FROM SEOUL, MARGARET WARNER GETS SOUTH KOREAN PERSPECTIVE ON THE RECENT HOSTILITIES ON THE KOREAN PENINSULA.

>> Reporter: SOUTH KOREANS ARE STILL REELING FROM LAST YEAR'S AGGRESSION BY THE NORTH. WE EXPLORE THEIR REACTION AND WHAT IT MEANS FOR THEIR NATION GOING FORWARD.

>> Woodruff: LINDSEY HILSUM OF "INDEPENDENT TELEVISION NEWS" TALKS TO A GROUP OF STUDENTS IN BEIJING ABOUT HOW THEY VIEW THEMSELVES AND HOW THE WORLD SEES CHINA.

>> Lehrer: WE INTERVIEW OKLAHOMA CITY MAYOR MICK CORNETT AND CHARLOTTE MAYOR ANTHONY FOXX ABOUT THEIR BUDGET TROUBLES AND THEIR MEETING WITH PRESIDENT OBAMA TODAY.

>> Woodruff: AND WE CLOSE WITH AN EXCERPT FROM JOHN F. KENNEDY'S INAUGURAL ADDRESS 50 YEARS LATER.

>> Lehrer: THAT'S ALL AHEAD ON TONIGHT'S "NEWSHOUR." MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OKAY, LISTEN. SOMEBODY HAS GOT TO GET SERIOUS.

>> I THINK...

>> WE NEED RENEWABLE ENERGY.

>> ...RENEWABLE ENERGY IS VITAL TO OUR PLANET.

>> YOU HEAR ABOUT ALTERNATIVES, RIGHT? WIND, SOLAR, ALGAE.

>> I THINK IT'S GOING TO WORK AN A BIG SCALE. ONLY, I THINK IT'S GOING TO BE AFFORDABLE.

>> SO, WHERE ARE THEY?

>> IT HAS TO WORK IN THE REAL WORLD. AT CHEVRON, WE'RE INVESTING MILLIONS IN SOLAR AND BIOFUEL TECHNOLOGY TO MAKE IT WORK.

>> WE'VE GOT TO GET ON THIS NOW.

>> RIGHT NOW.

>> AND BY THE BILL AND MELINDA GATES FOUNDATION. DEDICATED TO THE IDEA THAT ALL PEOPLE DESERVE THE CHANCE TO LIVE A HEALTHY PRODUCTIVE LIFE. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU.

>> Lehrer: THE PRESIDENT OF CHINA TURNED HIS ATTENTION TO CONGRESS AND THE BUSINESS WORLD TODAY AND HE PORTRAYED CHINA AS AN ECONOMIC PARTNER. JEFFREY BROWN HAS OUR REPORT.

>> Brown: PRESIDENT HU JINTAO BEGAN DAY THREE OF HIS VISIT TO WASHINGTON, ARRIVING AT THE CAPITOL FOR CALLS ON CONGRESSIONAL LEADERS. HIS PHOTO-OP WITH SENATE MAJORITY LEADER HARRY REID WAS BRIEF AND BRIEFLY AWKWARD WHEN A REPORTER SHOUTED THIS QUESTION.

>> SENATOR REID, WHAT DO YOU EXPECT TO ACCOMPLISH WITH A MAN YOU CALLED A DICTATOR?

>> Brown: REID HAD MADE THAT STATEMENT ABOUT HU IN AN INTERVIEW ON WEDNESDAY, BUT THEN RETRACTED IT. HU'S MEETING ON THE HOUSE SIDE WITH SPEAKER JOHN BOEHNER WAS NOT OPEN TO REPORTERS, BUT BOEHNER SPOKE LATER.

>> WE DID DISCUSS OUR ECONOMIC RELATIONSHIP. I DID EXPRESS MY CONCERNS ABOUT RELIGIOUS LIBERTY, I EXPRESSED MY CONCERNS ABOUT INTELLECTUAL PROPERTY AND THE ISSUE OF NORTH KOREA. THE PRESIDENT RESPONDED AND I WOULD HOPE THE DIALOGUE ON ALL SUBJECTS WILL CONTINUE.

>> Brown: THE MEETINGS ON CAPITOL HILL FOLLOWED AN EVENING OF POMP AND CEREMONY AT THE WHITE HOUSE. THE OFFICIAL STATE DINNER WAS ATTENDED BY A NUMBER OF CELEBRITIES, BUT ALSO BUSINESS LEADERS INCLUDING THE HEADS OF GOLDMAN SACHS AND J.P. MORGAN AND THE C.E.O. OF DISNEY. TODAY, IN A SPEECH TO THE U.S.- CHINA BUSINESS COUNCIL HU HIGHLIGHTED BUSINESS TIES BETWEEN THE TWO COUNTRIES UNDERSCORING THE BENEFITS FOR U.S. FIRMS.

>> ( translated ): FOR MANY AMERICAN COMPANIES THEIR BUSINESSES IN CHINA HAVE BECOME THE BIGGEST SOURCE OF PROFIT IN THEIR GLOBAL OPERATIONS. EVEN IN 2008 AND 2009 WHEN THE INTERNATIONAL FINANCIAL CRISIS WAS MOST SEVERE, OVER 70% OF AMERICAN COMPANIES IN CHINA REMAINED PROFITABLE.

>> Brown: CHINA, IN FACT, HAS WEATHERED THE GLOBAL ECONOMIC DOWNTURN FAR BETTER THAN MOST. NEW DATA RELEASED IN BEIJING TODAY SHOWED CHINESE GROWTH TOPPING 10% LAST YEAR. AT THE SAME TIME, ECONOMIC TENSIONS HAVE GROWN WITH U.S. CHARGES THAT CHINA KEEPS ITS CURRENCY ARTIFICIALLY LOW AND HAS MADE IT HARDER FOR FOREIGN COMPANIES TO SELL IN CHINA. TODAY, HU FOCUSED ON GREATER COOPERATION.

>> ( translated ): CHINA-U.S. RELATIONSHIP IS NOT ONE IN WHICH ONE SIDE'S GAIN MEANS THE OTHER SIDES LOSS. RATHER IT SHOULD BE A RELATIONSHIP IN WHICH THE TWO SIDES RESPECT EACH OTHER AND ENDEAVOR TO DEEPEN STRATEGIC MUTUAL TRUST. IT SHOULD BE A RELATIONSHIP THAT HIGHLIGHTS COMMON INTERESTS AND COOPERATION IN ALL FIELDS. ON WEDNESDAY, PRESIDENT OBAMA RAISED ONE AREA OF DISAGREEMENT -- HUMAN RIGHTS-- AND HU ACKNOWLEDGED CHINA HAS MORE WORK TO DO. TODAY, WHITE HOUSE PRESS SECRETARY ROBERT GIBBS SAID THE U.S. WANTS CHINESE ACTIONS TO MATCH THOSE WORDS, BUT HE WELCOMED HU'S STATEMENT.

>> I THINK YOU WOULD ALL HAVE TO STRAIN YOUR RECENT MEMORY TO FIND A LEADER FROM CHINA TRAVELING OUTSIDE HIS COUNTRY, OR IN, AFTER MEETING WITH THE PRESIDENT ON NUMBER OF OCCASIONS MAKING SUCH A FRANK ADMISSION OF IMPROVEMENT THAT NEEDED TO HAPPEN IN COUNTRY OF CHINA ON HUMAN RIGHTS.

>> Brown: AS HE WOUND UP HIS WASHINGTON VISIT TODAY, HU CALLED FOR BOTH SIDES TO FOCUS ON THE FUTURE.

>> ( translated ): CHINA AND THE U.S. ARE DIFFERENT IN HISTORY, CULTURE SOCIAL SYSTEM AND DEVELOPMENT LEVEL. IT IS THUS ONLY NORMAL THAT WE HAVE SOME DISAGREEMENTS AND FRICTIONS. WE SHOULD VIEW AND HANDLE BILATERAL RELATIONS FROM A STRATEGIC LONG TERM PERSPECTIVE AND WITH A SENSE OF RESPONSIBILITY TO HISTORY AND TO THE FUTURE. WE SHOULD PREVENT OUR RELATIONS FROM BEING HELD BACK BY ANY INDIVIDUAL INCIDENT.

>> Brown: LATER, THE CHINESE LEADER HEADED TO CHICAGO, WHERE HE'LL CONTINUE TO FOCUS ON BUSINESS AND ECONOMIC TIES. AND WE DO OUR OWN FOCUS ON THOSE ISSUES NOW, WITH MYRON BRILLIANT, SENIOR VICE PRESIDENT FOR INTERNATIONAL AFFAIRS AT THE U.S. CHAMBER OF COMMERCE. THEA LEE, DEPUTY CHIEF OF STAFF AT THE AFL-CIO. AND YUKON HUANG IS A SENIOR ASSOCIATE AT THE CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE AND PREVIOUSLY OVERSAW THE WORLD BANK'S PROGRAM FOR CHINA. MAYON BRILLIANT, START WITH YOU. YESTERDAY PRESIDENT OBAMA SAID "I ABSOLUTELY BELIEVE CHINA'S PEACEFUL RISE IS GOOD FOR THE WORLD AND GOOD FOR AMERICA. IS ITS ECONOMIC RISE GOOD FOR AMERICA?

>> I THINK IT IS GOOD FOR AMERICA. WE'RE TALKING AND THE SECOND-LARGEST ECONOMY IN THE WORLD, SOON TO BE THE LARGEST ECONOMY, TEN, 15 YEARS FROM NOW. SO IT'S VERY IMPORTANT WE PARTICIPATE IN ITS MARKET, THAT AMERICAN COMPANIES ARE ABLE TO COMPETE AND PROSPER IN CHINA. AND I BELIEVE THAT, YOU THOUGH, WE'VE SEEN TREMENDOUS ECONOMIC GROWTH IN THIS RELATIONSHIP. SINCE 2000 WELL OVER 300% INCREASE IN NET MARKETS. SO THERE'S AN ENORMOUS PROMISE FOR OUR FARMERS, MANUFACTURERS, SERVICE PROVIDERS. MORE NEEDS TO BE DONE BUT IT'S A GOOD MARKET AND IT'S IMPORTANT WE CONTINUE TO ENGAGE IT.

>> Brown: THEA LEE, STARTING OFF WITH OPPORTUNITIES HERE, BUT WHAT'S THE KEY PROBLEM YOU SEE RIGHT NOW IN THE RELATIONSHIP?

>> WELL, THE CHINESE ECONOMY IS ENORMOUSLY IMPORTANT TO THE UNITED STATES AND IT HAS ENORMOUS POTENTIAL. BUT UNFORTUNATELY RIGHT NOW THERE ARE A LOT OF TRADE FRICTIONS BECAUSE THE CHINESE GOVERNMENT IS NOT PLAYING BY THE RULES, WHETHER IT'S RESPECT TO CURRENCY MANIPULATION, EGREGIOUS VIOLATION OF WORKERS' RIGHTS OR ILLEGAL SUBSIDIES. SO WE CAN'T HAVE A HEALTHY AND SUSTAINABLE TRADE RELATIONSHIP WITH A COUNTRY THAT DOESN'T PLAY BY THE RULES. RIGHT NOW WE HAVE A MORE THAN $250 BILLION TRADE DEFICIT WITH CHINA BECAUSE WE'RE IMPORTING SO MUCH MORE PRODUCTS THAN WE WERE ABLE TO EXPORT. WE NEED TO FIGURE OUT HOW TO GET THAT RELATIONSHIP ON A MORE BALANCED FOOTING AND WE NEED TO FIGURE OUT HOW TO GET THE CHINESE GOVERNMENT TO COMPLY WITH THE INTERNATIONAL OBLIGATION IT'S AGREED TO.

>> Brown: YUKON HUANG, THE CHINESE CAME TOUTING SOME RECENT BUSINESS DEALS AND SAID THEY MADE ADJUSTMENTS ON THE CURRENCY. WHAT'S THE CHINESE PERSPECTIVE ON THESE TENSIONS THAT GET SO MUCH ATTENTION HERE?

>> WELL, THE WORLD SEES A CHINA RISING, THE NEXT SUPERPOWER. CHINA LOOKING FORWARD SEES A COUNTRY WHICH IS MIRED IN WHAT I CALL LOW-COST, LABOR-INTENSIVE PRODUCTION PROCESSES. COMMENSURATE WITH THE ECONOMY THAT HAS AN ECONOMY OF LESS THAN $1,000. THEY SAY WE HAVE TO GO UP THE VALUE CHAIN AND MOVE TO HIGHER VALUE TECHNOLOGY PRODUCT LINES.

>> Brown: THEREFORE?

>> WHAT THEY'RE KEEN ON DOING IS ACQUIRING TECHNOLOGY AND THEREFORE THERE'S A CONTROVERSY OVER INDIGENOUS INNOVATION, THE RULES OF THE GAME. IN SOME CASES IT'S VERY GRAY, NOT TRANSPARENT. SIMILAR PRACTICES EXIST IN EVERY COUNTRY, BOTH IN EUROPE, U.S., AS WELL AS CHINA. AND I ALSO AGREE WITH THEA, THIS QUESTION OF TRANSPARENCY AND HOW YOU DEFINE THIS IS A KEY ISSUE FOR EVERYBODY IN THE COMING YEARS.

>> Brown: SO MYRON BRILLIANT, YOU START OFF TALKING ABOUT THE OPPORTUNITY BUS YOUR COMPANIES ARE HAVING ALL KINDS OF PROBLEMS.

>> WELL, IT MAY BE FUNNY FOR YOUR VIEWERS TO REALIZE THAT THEA LEE AND I AGREE ON A LOT. WE DON'T HAVE REGULATORY ISSUES....

>> Brown: WE DON'T SEE THAT ALL THAT OFTEN ON THIS PROGRAM.

>> IN THIS ISSUE WE SHARE COMMON VIEWS. WE HAVE CONCERNS ABOUT CHINA'S INTELLECTUAL PROPERTY RECORD. WE ALSO WANT TO SEE CHINA'S CURRENCY APPRECIATE, WE THINK THAT WOULD HELP OUR TRADING RELATIONSHIP. BUT ALSO AS IMPORTANTLY WE HAVE A RANGE OF REGULATORY ISSUES IN THAT MARKET. WE WANT TO SEE HOW CHINA WILL DEVELOP A LEVEL PLAYING NEED ALLOWS OUR COMPANIES TO INVEST AND EXPORT TO THAT MARKET. SO WE HAVE SOME CHALLENGES IN THAT MARKET. WE SHOULD NOT SKIRT OVER THE DIFFERENCES. I WAS PLEASED THE THAT PRESIDENT OBAMA RAISED THOSE ISSUES. NOW WE NEED TO SEE HOW CHINA RESPONDS.

>> Brown: MAKE IT CONCRETE. CAN YOU GIVE US AN EXAMPLE OF A PARTICULAR... OF THE... HOW THE PROBLEM WKS ITSELF OUT FOR A COMPANY?

>> WELL, THERE ARE A NUMBER OF PROBLEMS, ONE THAT HAS GOTTEN A LOT OF ATTENTION IS HOW CHINA DEVELOPED AN INDIGENOUS INNOVATION POLICY THAT BASICALLY CUT OUR I.T. COMPANIES IN ADVANCED MANUFACTURING COMPANIES POTENTIALLY OUT OF THE PROCUREMENT MARKET. NOW, THE TWO SIDES HAVE WORKED ON THAT, THERE WAS PROGRESS MADE BETWEEN THE TWO PRESIDENTS AND HOPEFULLY WE'VE ADDRESSED THAT BUT THEY WERE SAYING IF WE DIDN'T REGISTER OUR I.P. IN THAT MARKET WE WOULD NOT COMPETE FOR PROCUREMENT CONTRACTS, BOTH AT THE CENTRAL GOVERNMENT LEVEL AND THE PROVINCIAL LEVEL. HUNDREDS OF BILLIONS OF DOLLARS AT STAKE. SO THIS IS... WE'VE MADE SOME PROGRESS AND WE'LL SEE HOW IT'S IMPLEMENTED BY THE CHINESE GOVERNMENT.

>> Brown: THEA LEE, DO YOU SEE MOVEMENT ON THE CHINESE SIDE? YUKON HUANG WAS TALKING ABOUT THEIR PERSPECTIVE OF WHAT THEY'RE TRYING TO DO TO GROW THEIR ECONOMY. SO THEY'VE CLEARLY GOT THEIR ISSUES AS WELL. DO YOU SEE THEM MOVING IN THE RIGHT DIRECTION ON SOME OF THESE AREAS?

>> I THINK THE MOVEMENT HAS BEEN WAY TOO SLOW ON THE PART OF THE CHINESE GOVERNMENT ON ALL THE AREAS THAT I TALKED ABOUT CERTAINLY. WHETHER IT'S CURRENCY... IF YOU HAVE A 40% IMBALANCE IN THE CURRENCY AND YOU MAKE A HALF PERCENT APPRECIATION, THAT'S JUST BUYING TIME. THAT'S NOT SOLVING THE PROBLEM. AND MEANWHILE, AS THEY SLOW WALK THE SOLUTIONS TO THOSE PROBLEMS, WE'RE LOSING JOBS. NOW, AMERICAN COMPANIES ARE MORE PATIENT BECAUSE THEY'RE MAKING MONEY IN CHINA. BUT AMERICAN WORKERS ARE LOSING THEIR JOBS AND WE HAVE A CRISIS SITUATION RIGHT NOW. THE SAME THING WITH WORKERS' RIGHTS. THERE HAS BEEN SOME VERY, VERY SLOW PROGRESS. BUT THIS IS AN ENORMOUSLY IMPORTANT COUNTRY FOR US AND YET CHINESE WORKERS LACK BASIC HUMAN RIGHTS, THEY CAN'T FORM AN INDEPENDENT UNION, THEY CANNOT BARGAIN COLLECTIVELY WITH THEIR EMPLOYER OVER WAGES OR WORKING CONDITIONS AND THE CHINESE GOVERNMENT DOESN'T ENFORCE ANY OF ITS LABOR LAWS EFFECTIVELY, WHETHER IT'S MINIMUM WAGE, MAXIMUM HOURS, HEALTH AND SAFETY OR PROTECTIONS AGAINST CHILD LABOR OR SLAVE LABOR. AND SO WE HAVE SOME REAL SERIOUS PROBLEMS AND THE PROGRESS IS WAY TOO SLOW IN MY VIEW.

>> Brown: OF COURSE, YUKON HUANG IT'S OFTEN POINTED OUT THE U.S. HAS ITS OWN IMBALANCES, RIGHT? SPENDING BEYOND OUR MEANS LEADING TO THIS TRADE IMBALANCE.

>> LET ME SPEAK ABOUT THE TRADE IMBALANCE. CHINA'S TRADE SURPLUS FIVE YEARS AGO WAS 8% OF G.D.P.. THIS YEAR HE THAT WE JUST FINISHED IT FELL TO 3%. MY GUESS IS BY THE NEXT YEAR OR TWO IT'S GOING TO BE 1% OR 2%, INSIGNIFICANT, IT'S GOING TO BE BELOW THE GUIDELINE THAT SECRETARY GEITHNER ESTABLISHED. SO I DON'T THINK THE TRADE ISSUE IS A SERIOUS ISSUE. IT'S MOVING IN THE RIGHT DIRECTION. NOR IS THE EXCHANGE RATE A SERIOUS ISSUE. THERE'S AN ISSUE ABOUT JOBS. WHAT'S IRONIC, OF COURSE, IS THAT THE U.S. GENERAL PUBLIC AND THE CHINESE GENERAL PUBLIC SHARE THE SAME GENERAL QUESTIONS. WE NEED MORE JOBS, HIGHER-PAYING JOBS. HOW DO WE GET AT IT? NOW, THE UNFORTUNATE ISSUE THAT THE U.S. IS THE MOST INNOVATIVE HIGH TECHNOLOGY COUNTRY IN THE WORLD. CHINA, IS, IN FACT, PRODUCING ONLY A RANGE OF LOW-TECHNOLOGY JOBS. FOR CHINA IS REAL ISSUE IS HOW DO I MOVE UP THE VALUE CHAIN? AND THERE ARE VERY FEW EXAMPLES OF SUCCESSFUL COUNTRIES THAT HAVE DONE THIS. ACTUALLY, ONLY ONE AND THAT'S KOREA. AND IF YOU LOOK AT KOREA VERY CLOSELY, YOU SEE THE THAT KOREANS DID THIS THROUGH INDIGENOUS INNOVATION. SO CHINA IS COPYING A MODEL OF ANOTHER COUNTRY, THE ONLY ONE THEY'VE BEEN ABLE TO FIND AND THE QUESTION IS IS THIS CONSISTENT WITH THE RULES OF THE GAME.

>> Brown: WELL, MYRON BRILLIANT, EVERYBODY IS SAYING WE NEED TO BE MORE PROACTIVE OR WATCH THE RULES OF THE GAME HERE. HOW... WHAT SPECIFICALLY SHOULD THE OBAMA ADMINISTRATION DO? HOW HARD DO THEY PUSH? DO THEY... WE START TO SET OUR OWN BARRIERS, FOR EXAMPLE?

>> WELL, NO, I DON'T THINK THE ANSWER IS TO ERECT PROTECTIONIST BARRIERS. ONE, WE NEED TO ENSURE WE HAVE OUR COMPETITIVENESS AGENDA IN PLACE. THAT'S INVESTING IN EDUCATION. IT'S MAKING SURE WE HAVE A PRO BUST TRADE AGENDA. PASSING FREE TRADE AGREEMENTS. IT'S MAKING SURE WE INVEST IN INFRASTRUCTURE AND R&D. ONE PART OF THE SOLUTION IS THAT WE WORK DOMESTICALLY TO HAVE THE RIGHT POLICIES IN PLACE. WITH RESPECT TO CHINA IN PARTICULAR, I THINK WE NEED TO CONTINUE TO PRESS THE CHINESE IN THESE DIALOGUES THAT THEY... IF THEY ARE GOING TO BE A GLOBAL ECONOMIC POWER IT COMES WITH RIGHTS AND RESPONSIBILITIES. THEY NEED TO PARTICIPATE IN THE INTERNATIONAL RULES AND THEY NEED TO ENSURE THAT IF THEY WANT TO BE ABLE TO COMPETE IN OUR MARKET, IN OTHER MARKETS AROUND THE WORLD THAT THEY HAVE TO HAVE A LEVEL PLAYING FIELD FOR OUR GOODS AND SERVICES. AND RIGHT NOW IT'S NOT A LEVEL PLAYING FIELD AND WE NEED TO ADDRESS THAT.

>> Brown: THEA LEE, PRESS HOW HARD IS THE QUESTION? HOW WOULD YOU FIGHT THIS BATTLE?

>> WELL, I WOULD PRESS BEYOND STRATEGIC DIALOGUES AND UNENDING STATE VISITS WHERE NOTHING ACTUALLY GETS DONE. I THINK THE UNITED STATES NEEDS TO BRING SOME CASES TO THE WORLD TRADE ORGANIZATION, MORE CASES THAN WE HAVE, PARTICULARLY ON THE ISSUE OF CURRENCY MANIPULATION AND WORKERS' RIGHTS VIOLATIONS BECAUSE THESE ARE AREAS WHERE THE CHINESE GOVERNMENT IS GAINING AN ENORMOUS UNFAIR COMPETITIVE ADVANTAGE FOR AMERICAN PRODUCERS AND WORKERS AND OUR GOVERNMENT IS THE DOING TOO LITTLE TO CHALLENGE THEM. AND I AGREE WITH SOME OF WHAT MYRON SAID. I THINK UNITED STATES NEEDS ITS OWN COHERENT NATIONAL ECONOMIC STRATEGY WITH RESPECT TO INFRASTRUCTURE AND EDUCATION. UNFORTUNATELY WE SEE NERVE THE UNITED STATES OBSESSED RIGHT NOW WITH CUTTING STATE BUDGETS AND CUTTING FUNDS FOR EDUCATION AND FOR INFRASTRUCTURE. AND THAT IS THE WRONG DIRECTION. CHINA'S NOT CUTTING THE FUNDS IT'S SPENDING ON INFRASTRUCTURE AND EDUCATION, THE UNITED STATES SHOULDN'T BE, EITHER. WE NEED TO PRESS A LOT HARDER THAN WE HAVE AND WE NEED TO COME OUT WITH MORE CONCRETE RESULTS THAN WE DID FROM THIS LAST SUMMIT.

>> Brown: TIME FOR A QUICK RESPONSE.

>> THREE REACTIONS TO WHAT THEA SAID. FIRST OF ALL, THERE ARE AREAS WHERE WE SHOULD BE LOOKING AT MULTILATERAL NOT UNILATERAL OR BILATERAL APPROACHES TO DEALING WITH ISSUES, ECONOMIC REBALANCING IS ONE OF THEM. SECOND, WHEN WE'RE DEALING WITH SUMMITS, WE ACTUALLY DO GET RESULTS OUT OF THESE DEALS. I WILL TELL YOU THAT INDIGENOUS INNOVATION WOULD NOT HAVE BEEN RESOLVED WITHOUT THE VISIT OF PRESIDENT HU JINTAO. WE WOULD NOT HAVE $45 BILLION WORTH OF CONTRACTS WITHOUT HU JINTAO'S VISIT. SO THE VISITS ARE IMPORTANT AND THEY DO CREATE JOBS HERE IN THE U.S. AND, THIRD, WE'RE NOT OPPOSED TO USING ENFORCEMENT TOOLS THAT THE UNITED STATES HAS. THAT'S THE LAST RESORT. THAT'S NOT THE FIRST STEP IN DEALING WITH CHINA. WE NEED TO ENGAGE CHINA.

>> Brown: ALL RIGHT. WE HAVE TO LEAVE IT THERE. THEA LEE, MYRON BRILLIANT AND YUKON HUANG, THANK YOU VERY MUCH.

>> THANK YOU.

>> THANK YOU VERY MUCH.

>> Woodruff: STILL TO COME ON THE "NEWSHOUR": SOUTH KOREAN WORRIES ABOUT NORTH KOREA; THE VIEWS OF CHINESE STUDENTS ABOUT AMERICA; THE MONEY TROUBLES OF U.S. MAYORS AND JOHN KENNEDY'S INAUGURAL ADDRESS 50 YEARS LATER. BUT FIRST, THE OTHER NEWS OF THE DAY. HERE'S KWAME HOLMAN.

>> Holman: AT LEAST 51 PEOPLE WERE KILLED IN IRAQ TODAY WHEN THREE SUICIDE CAR BOMBERS DROVE INTO CHECKPOINTS, SOUTH OF BAGHDAD. MORE THAN 180 PEOPLE WERE WOUNDED IN THE ATTACKS NEAR KARBALA. MOST WERE SHI-ITE PILGRIMS EN ROUTE THERE FOR ANNUAL CEREMONIES. AND IN AFGHANISTAN, INSURGENT ATTACKS KILLED THREE NATO SOLDIERS. THAT RAISED THE TOTAL SO FAR THIS MONTH TO 22. IN TUNISIA, GOVERNMENT TROOPS FIRED WARNING SHOTS AS SOME 2000 PROTESTERS MARCHED ON THE RULING PARTY'S HEADQUARTERS IN TUNIS. THE DEMONSTRATIONS HOWEVER WERE MOSTLY PEACEFUL. THE MARCHERS TOOK DOWN PART OF A SIGN BEARING THE PARTY'S NAME, AND CRITICIZED THE NEW UNITY GOVERNMENT FOR INCLUDING OLD GUARD LAWMAKERS. LATER, THE GOVERNMENT ANNOUNCED IT WILL RECOGNIZE ALL BANNED POLITICAL GROUPS AND GRANT AMNESTY TO ALL POLITICAL PRISONERS. MORE THAN 100 PEOPLE WERE ARRESTED TODAY IN NEW YORK AND NEW ENGLAND IN A MAJOR ORGANIZED CRIME BUST. FEDERAL PROSECUTORS CALLED IT ONE OF THE LARGEST MAFIA CRACKDOWNS IN FBI HISTORY. THE MASS ARRESTS TOOK PLACE EARLY THIS MORNING, AFTER A MULTI-YEAR INVESTIGATION.

>> STATE, LOCAL, EVERYONE IS PARTICIPATING IN THIS MAJOR TAKEDOWN.

>> Holman: SOME 800 FEDERAL AGENTS AND POLICE SWEPT UP SUSPECTS FROM ALL FIVE OF NEW YORK'S CRIME FAMILIES AND OTHERS. THE CHARGES WERE BROUGHT IN IN BROOKLYN, MANHATTAN, NEWARK, NEW JERSEY AND PROVIDENCE, RHODE ISLAND. IN ALL, 127 PEOPLE WERE ACCUSED, INCLUDING LUIGI MANOCCHIO-- THE REPUTED FORMER MOB BOSS FOR ALL OF NEW ENGLAND. AT A BROOKLYN NEWS CONFERENCE, U.S. ATTORNEY GENERAL ERIC HOLDER SAID THE CHARGES COVER DECADES.

>> THEIR ALLEGED CRIMES INCLUDE NUMEROUS VIOLENT AND ILLEGAL ACTS FROM MURDER AND NARCOTICS TRAFFICKING TO EXTORTION, ILLEGAL GAMBLING, ARSON, LOAN SHARKING, AND LABOR RACKETEERING. NOW SOME ALLEGATIONS INCLUDE CLASSIC MOB HITS TO ELIMINATE PERCEIVED RIVALS. OTHERS INVOLVE TRULY SENSELESS MURDERS. IN ONE INSTANCE, A VICTIM WAS ALLEGEDLY SHOT AND KILLED DURING A BOTCHED ROBBERY ATTEMPT.

>> Holman: TODAY'S ROUNDUP WAS THE LATEST IN A SERIES OF BLOWS THAT HAVE WEAKENED ORGANIZED CRIME IN RECENT YEARS. SHAKEUPS AT TWO HIGH-TECH GIANTS DOMINATED THE DAY'S ECONOMIC NEWS. GOOGLE ANNOUNCED CO-FOUNDER LARRY PAGE WILL RETURN AS C.E.O., IN APRIL. HE GAVE UP THAT JOB TEN YEARS AGO. AND HEWLETT-PACKARD SAID FOUR DIRECTORS ARE LEAVING. THAT FOLLOWS A SERIES OF SCANDALS, INCLUDING THE OUSTER OF FORMER C.E.O. MARK HURD LAST YEAR OVER SEXUAL HARASSMENT CHARGES. ON WALL STREET, STOCKS HAD AN OFF DAY. THE DOW JONES INDUSTRIAL AVERAGE LOST TWO POINTS TO CLOSE AT 11,822. THE NASDAQ FELL 21 POINTS TO CLOSE AT 2,704. HOUSE REPUBLICANS MOVED AHEAD TODAY WITH PLANS TO CRAFT THEIR OWN HEALTH CARE OVERHAUL. ON WEDNESDAY, THEY VOTED TO REPEAL THE HEALTH REFORM LAW ENACTED BY DEMOCRATS. TODAY, IN ANOTHER MOSTLY PARTY- LINE VOTE, THEY INSTRUCTED KEY COMMITTEES TO DEVELOP ALTERNATIVES.

>> WE HAVE NOW REPEALED THE BILL HERE IN THE HOUSE AND WE HAVE THE OPPORTUNITY TO BRING THOSE PROVISIONS FORWARD ONE BY ONE. I'LL TELL YOU WHAT. I'M NOT GOING TO LIKE ALL THOSE PROVISIONS AND SOME OF THOSE PROVISIONS ARE GOING TO PASS THE HOUSE AND THAT'S THE WAY IT OUGHT TO BE. YOU SHOULDN'T HAVE THE ONE SIZE FITS ALL, TAKE IT OR LEAVE IT KIND OF SYSTEM. YOU OUGHT TO BE ABLE TO HAVE THAT DISCUSSION ON BOTH SIDES OF THE AISLE.

>> Holman: DEMOCRATS CALLED TODAY'S ACTION A POLITICAL PLOY AND SAID THE PUBLIC WILL SEE THAT THE REPUBLICAN ALTERNATIVES FALL SHORT.

>> MY FRIENDS ON THE OTHER SIDE OF THE AISLE GOT UP OVER AND OVER AND OVER AGAIN AND SAID WE'RE REALLY WITH YOU ON PRE- EXISTING CONDITIONS. WE'RE REALLY WITH YOU ON THE DONUT HOLE. WE'RE WITH YOU ON ALLOWING PARENTS TO KEEP THEIR KIDS ON THEIR INSURANCE UNTIL THEY'RE 26. BUT YET THEY'RE REALLY NOT BECAUSE IF THEY WERE, THEY WOULDN'T HAVE VOTED YESTERDAY TO REPEAL ALL THOSE PROTECTIONS.

>> Holman: DEMOCRATIC LEADERS IN THE SENATE CONTINUED TO INDICATE THEY WILL BLOCK ANY REPEAL VOTE THERE. THERE'S BEEN MORE GOOD NEWS ON THE RECOVERY OF CONGRESSWOMAN GABRIELLE GIFFORDS. SHE'S NOW ABLE TO STAND WITH ASSISTANCE, LESS THAN TWO WEEKS AFTER BEING SHOT IN THE HEAD. AND TODAY, DOCTORS IN TUCSON, ARIZONA SAID GIFFORDS ALSO IS ABLE TO SCROLL THROUGH AN iPAD. IT IS NOT YET CLEAR IF SHE CAN SPEAK OR HOW WELL SHE CAN SEE. HER HUSBAND ASTRONAUT MARK KELLY VOICED OPTIMISM TODAY. HE SAID, "SHE IS A FIGHTER LIKE NOBODY ELSE THAT I KNOW." A CALIFORNIA WOMAN WHO RECEIVED A RARE LARYNX TRANSPLANT LAST FALL HAD A KIND OF COMING OUT CELEBRATION TODAY. 52 YEAR-OLD BRENDA JENSEN UNDERWENT THE 18-HOUR OPERATION IN OCTOBER. AS THIS ANIMATION DEPICTS, SURGEONS BEGAN BY REMOVING HER DAMAGED LARYNX. THE NEW ORGAN AND THYROID THEN WERE ATTACHED TO SURROUNDING NERVES, ARTERIES AND VEINS. JENSON NOW CAN SPEAK FOR THE FIRST TIME IN MORE THAN A DECADE. SHE WAS REUNITED WITH HER MEDICAL TEAM TODAY IN SACRAMENTO.

>> IT'S JUST BEEN AMAZING, BECAUSE WHEN I TALK ON THE PHONE PEOPLE DON'T HANG UP ON ME OR IN NO MORE, I'VE GOT A REAL VOICE, THEY DON'T THINK I'M A TELEMARKETER. (LAUGHTER) IT'S JUST BEEN A BIG, BIG DIFFERENCE.

>> Holman: JENSEN'S OPERATION WAS JUST THE SECOND SUCCESSFUL LARYNX TRANSPLANT TO BE DOCUMENTED SINCE 1998. THOSE ARE SOME OF THE DAY'S MAJOR STORIES. NOW, BACK TO JIM.

>> Lehrer: AND TO THE SECOND OF MARGARET WARNER'S REPORTS FROM SOUTH KOREA. TONIGHT, THE TENSIONS BETWEEN NORTH AND SOUTH.

>> Reporter: KIM MOON SOO SEARCHED FOR FARES ON A RECENT SATURDAY, JUST LOOKING TO MAKE THE DAY-RATE ON HIS RENTED CAB. BUT IT'S NOT EVERY HACK LICENSE THAT FEATURES AN OFFICIAL PORTRAIT. THAT'S BECAUSE GOVERNOR KIM IS TAKING THE PULSE OF HIS PROVINCE FROM THE DRIVER'S SEAT SOME LATELY, HIS PASSENGERS CHATTER HAS BEEN ABOUT NORTH KOREA'S ATTACKS ON A SOUTH KOREAN WARSHIP, THE CHEONAN, AND ON YEONPEONG ISLAND JUST OFF THEIR PROVINCIAL COAST.

>> ( translated ): PEOPLE REALIZE THAT WAR IS SOMETHING THAT IS NOT FAR OFF; IT COULD HAPPEN SUDDENLY. SO THEY FEEL THERE'S NEED TO STRENGTHEN DEFENSE.

>> Reporter: A NEWS REPORT THAT THE NEXT LIKELY NORTH KOREAN TARGET WAS A MAINLAND CITY IN HIS PROVINCE SENT KIM INTO ACTION.

>> ( translated ): I MET WITH THE COMMANDERS OF THE ARMY, NAVY AND AIR FORCE, AND THE MINISTER OF DEFENSE, AND I SAID THAT IN CASE OF AN ATTACK, I DEMANDED A RETALIATION TEN TIMES MORE THAN WHAT THEY HAVE DONE TO US!

>> Reporter: THE GOVERNOR TOOK US TO SEE JUST HOW CLOSE HIS WITHIN FROZEN FOGGY SIGHT OF THE NORTH. BEING THIS CLOSE, DO YOU FEEL UNDER THREAT FROM NORTH KOREA?

>> ( translated ): IT DOESN'T TAKE MUCH. IF THEY WANT TO DESTROY US, THEN THEY CAN.

>> Reporter: BEFORE THE KOREAN ONE RECENT AFTERNOON, WE VISITED THE PARK FAMILY, HEADED BY 77- YEAR-OLD PARK SEUNG CHANG, A VETERAN OF THE KOREAN WAR. HOW DO YOU SEE THE NORTH KOREANS, WHAT IS YOUR OPINION OF THEM?

>> ( translated ): THEY'RE JUST PLAIN WARMONGERS. IF THEY ATTACK US, WE SHOULD ATTACK TWICE, THREE TIMES. SO THEY WOULD NEVER EVEN THINK OF ATTACKING US AGAIN.

>> Reporter: HIS SON PARK KYUNG- IL, AT 46, HAS TRAVELED NORTH SEVERAL TIMES AS A DRIVER.

>> ( translated ): I'VE MET WITH NORTH KOREANS, AND THEY WERE LIKE THE PEOPLE IN THE 50s AND 60s IN SOUTH KOREA. THEIR LIFE WAS SO PATHETIC. I FELT SORRY FOR LITTLE NORTH KOREAN CHILDREN.

>> Reporter: AND THERE WAS 18- YEAR-OLD PARK HO SUN, WHO SOON STARTS COLLEGE.

>> ( translated ): I'M A DEVOUT CHRISTIAN, SO I LOOKED ON NORTH KOREA WITH MORE SYMPATHY THAN WITH ENMITY. BUT THE ATTACK ON THE ISLAND MADE IT CLEAR TO ME THAT NORTH KOREA'S KIM JONG IL IS A BAD PERSON. AND IT'S NOT JUST MYSELF; MANY STUDENTS HAVE BEEN AFFECTED BY THE ATTACK.

>> Reporter: IN THE DAYS AFTER THE YEONPEONG ATTACK, THE SOUTH KOREAN DEFENSE MINISTER RESIGNED AND PRESIDENT LEE MYUN BAK ANNOUNCED TOUGH NEW RULES OF MILITARY ENGAGEMENT. IT WAS A REACTION TO THE FRIGHT, AND ANGER, MOST KOREANS EXPRESSED AT THE THREAT AND WHAT THEY SAW AS A WEAK, INEFFECTIVE MILITARY RESPONSE.

>> ( translated ): I'D LIKE TO HUMBLY ACCEPT THOSE CRITICISMS.

>> Reporter: CHANG GWANG-IL IS THE DEPUTY DEFENSE MINISTER FOR POLICY. WHAT WOULD YOU SAY TO THE SOUTH KOREAN PUBLIC IF THEY ARE WORRIED ABOUT WHETHER THEIR MILITARY COULD PROTECT THEM AND IS WILLING TO PROTECT THEM?

>> ( translated ): WHEN WE FACE THREATS WE WILL TAKE THE OPPORTUNITY TO BECOME MORE RESOLUTE AND WE'LL MAKE SURE THAT NORTH KOREA LEARNS A PAINFUL LESSON THAT ALL PROVOCATION WILL BE EXACTING A VERY COMPARABLE OR EXCEEDING COSTS OF THAT.

>> Reporter: CHANG NOTES AN UNINTENDED BENEFIT OF THE ATTACK-- A DOUBLING OF VOLUNTEERS FOR THE ELITE MARINE CORPS. SEUNG SOO HAN LEFT HIS LIFE AT BOSTON COLLEGE TO VOLUNTEER.

>> I NEVER THOUGHT ABOUT IT UNTIL THE CHEONAN, AND I JUST HAD TO COME HERE.

>> Reporter: HIS REGIMENT MONITORS A PORTION OF THE NORTH- SOUTH BORDER, SOMETIMES WITHIN

>> THE SITUATION IS DEFINITELY TENSE. THERE ARE NORTH KOREANS JUST A MILE AHEAD OF US.

>> Reporter: THE AMMUNITION THOSE MARINES CARRY COULD WELL HAVE COME FROM ONE OF INDUSTRIALIST ROY RYUS METAL FACTORIES. AMONG HIS BUSINESSES-- A LARGE DEFENSE CONTRACTING CONCERN, BEGUN BY HIS FATHER TO HELP ARM A YOUNG SOUTH KOREA.

>> IT IS THE PATRIOTIC PART OF THE BUSINESS THAT MY FATHER FOUNDED. THE RECENT ATTACKS WERE A SHOCK, HE SAID, BUT DID NOTHING TO DENT HIS OR SOUTH KOREA'S BOTTOM LINE.

>> OUR STOCK MARKET HAS HIT RECORD HIGHS THIS YEAR. OUR ECONOMY IS IMPROVING 5% LAST YEAR SO AND THE FOREIGNERS CONTINUE TO INVEST SO IT HAS NO CHANGE WHATSOEVER.

>> Reporter: OVER THE PAST THREE DECADES SOUTH KOREA HAS TRANSFORMED FROM A PROVINCIAL BACKWATER TO A HIGH TECH HUB KNOWN FOR SAMSUNG FLAT-SCREENS, HYUNDAI MOTORS, AND A HIGH- FLYING STOCK MARKET: AND THE WORLD'S 12th LARGEST ECONOMY.

>> BECAUSE OF THIS NORTH KOREAN AGGRESSION, WE USED TO HAVE SO- CALLED KOREAN DISCOUNT IN OUR STOCK MARKET.

>> Reporter: FOR YEARS, HE SAYS, THE SPECTRE OF ALL-OUT CONFLICT THE SPECTER OF ALL-OUT CONFLICT DEPRESSED STOCK VALUES SOME 40%. NOW THE DISCOUNT IS ONLY IN THE 10%-20% RANGE, BUT ITS STILL THERE.

>> SOUTH KOREAN ECONOMY HAS MORE THINGS TO LOSE OUT OF WAR OR MILITARY CONFLICT THAN NORTH KOREAN ECONOMY. SO THAT'S WHY SOUTH KOREAN GOVERNMENT IS MORE RESTRAINED THAN THE NORTH KOREAN GOVERNMENT WHENEVER THESE TYPES OF MILITARY CONFLICT TAKE PLACE.

>> Reporter: FOR A DECADE AFTER THE LATE-'90s, THERE WAS AN ALTERNATE VISION PURSUED BASED MORE ON ACCOMMODATION THAN ANTAGONISM. THE SO-CALLED SUNSHINE POLICY OF THE LATE PRESIDENT KIM DAE JUNG. WITH GRANTING OUTRIGHT AID TO THE COMMUNIST NORTH, AND LETTING SOME SOUTH KOREAN BUSINESSES SET UP SHOP THERE.

>> ( translated ): THE IDEA WAS TO HAVE A WIN/WIN SOLUTION FOR BUSINESS AND POLITICS.

>> Reporter: KRIS SONG BOUGHT THE VISION OF SOUTH KOREAN THE AUTO PARTS FIRM HE USED TO RUN INVESTED $5 MILLION IN A PLANT AT THE KAESUNG INDUSTRIAL COMPLEX JUST OVER THE BORDER.

>> ( translated ): FROM THE POLITICAL STANDPOINT WE WERE THINKING FOR NORTH AND SOUTH RECONCILIATION. BUT THE PROBLEM IS THERE IS A BIG GAP BETWEEN THE INTENDED BASIC DIRECTION OF WHERE KAESONG IF GOING, AND WHERE IT IS NOW TODAY.

>> Reporter: LACK OF WORKER SKILLS AND TRANSPORTATION INFRASTRUCTURE MADE FOR MISSED DEADLINES, HE SAID, OR HUGE OVERTIME CHARGES. FINALLY, HIS FIRM FROZE ITS INVESTMENT AND NOW PLANS TO MOVE THE PLANT ELSEWHERE. AND EVEN IF THERE IS AN EXPANSION OF KAESONG INDUSTRIAL COMPLEXES ELSEWHERE IN NORTH KOREA YOUR COMPANY IS NOT GOING TO PART OF THAT?

>> NO. WE ALREADY HAVE ENOUGH EXPERIENCE.

>> Reporter: AN ARCHITECT OF THE SUNSHINE POLICY, PRESIDENT KIM DAE JUNG'S FORMER CHIEF OF STAFF, PARK JIE WON, SAYS IT IS TIME TO RE-ENGAGE WITH THE NORTH. NOW OPPOSITION DEMOCRATIC PARTY FLOOR LEADER IN THE LEGISLATURE, HE BLAMES PRESIDENT LEE'S NO- AID, NO-TRADE POLICIES FOR THE CURRENT CRISIS. HE SAYS ENGAGEMENT IS THE ONLY WAY TO HEAD OFF THE NORTH'S NUCLEAR AMBITIONS, AND THERE'S NOT A MOMENT TO LOSE.

>> ( translated ): IF WE ALLOW NORTH KOREA MORE TIME IT WILL BECOME MORE THREAT TO US. INSTEAD, LEE ADMINISTRATION IS PUSHING DENUCLEARIZATION WITH HARD LINE POLICY, TO TRY TO MAKE NORTH KOREA SUCCUMB TO PRESSURE AND COLLAPSE.

>> Reporter: AMONG MANY SOUTH KOREANS-- LIKE THOSE SHOPPING AT ONE OF SEOUL'S BASTIONS OF CONSUMERISM, THE I-PARK MALL-- THE PROSPECT OF NORTH KOREAN COLLAPSE, AND REUNIFICATION WITH THE SOUTH SEEMS AN ABSTRACTION. A DREAM TO BE DESIRED FOR SOME.

>> ( translated ): I HOPE NORTH KOREANS NO LONGER HAVE TO STARVE, AND CAN BE FREE LIKE US, EVEN IF IT TAKES A LONG TIME.

>> Reporter: A BURDEN TO BE AVOIDED FOR OTHERS.

>> ( translated ): THE ECONOMIC GAP IS SO BIG BETWEEN NORTH AND SOUTH THAT IF THERE IS UNIFICATION, IT WILL SLOW DOWN OUR DEVELOPMENT.

>> Reporter: BACK UP NEAR THE BORDER, GOVERNOR KIM MOON SOO

>> ( translated ): EVEN AS A YOUNG CHILDREN WE USED TO SING A SONG TITLED OUR WISH IS FOR UNIFICATION. UNIFICATION IS THE FOREMOST IMPORTANT MISSION FOR OUR STATE.

>> Reporter: FOR NOW, THOUGH,

>> I THINK THAT KOREANS BELIEVE THAT IT'S NOT GOING TO HAPPEN. WE PROBABLY FEEL SAFER HERE THAN BEING IN CALIFORNIA. I THINK THE ODDS OF AN EARTHQUAKE IN CALIFORNIA IS PROBABLY BIGGER THAN NORTH KOREAN ARTILLERY HITTING SOUTH KOREA.

>> Woodruff: AS MARGARET JUST SAID, NORTH KOREAN OFFICIALS OFFERED TODAY TO HOLD HIGH LEVEL MILITARY TALKS WITH SOUTH KOREA AND SEOUL AGREED. IN WASHINGTON, A STATE DEPARTMENT OFFICIAL CALLED THE MOVE A POSITIVE SIGN TOWARD EASING TENSIONS IN THE REGION. WE ASKED MARGARET TO EXPLAIN TODAY'S DEVELOPMENTS.

>> Reporter: IT DOES APPEAR TO BE A VICTORY FOR THE HARD LINE TAKEN OF LATE BY SOUTH KOREAN PRESIDENT LEE MYUN BAK. SINCE DECEMBER, HE'S BEEN RESISTING the NORTH'S CALL FOR UNCONDITIONAL TALKS ON ECONOMIC AID INSISTING THE NORTH HAD TO FIRST APOLOGIZE OR AT LEAST OWN UP TO LAST YEAR'S ATTACKS. THE NORTH'S NEW OFFER WHICH CAME IN THIS MORNING, CALLED FOR MILITARY-TO-MILITARY TALKS. AND THAT, A TOP U.S. OFFICIAL TOLD ME, IS WHAT PERSUADED THE SOUTH THAT THE NORTH WAS READY TO ADDRESS IT'S CONCERN. THE RIGHT PLAYERS WILL BE IN THE ROOM, THE OFFICIAL SAID. THE NORTH CAME AROUND TO USING THE CHANNEL THE SOUTH THOUGHT WAS APPROPRIATE. WHAT CAUSED THE TURNAROUND? THE SOUTH KOREAN PRESS IS MAKING MUCH OF THE FACT THAT IT COMES JUST A DAY AFTER PRESIDENT OBAMA MET WITH PRESIDENT HU IN WASHINGTON. THEY ISSUED A JOINT STATEMENT CALLING FOR A NORTH-SOUTH DIALOGUE ALSO EXPRESSING CONCERN ABOUT THE NORTH KOREA'S URANIUM ENRICHMENT PROGRAM. AND A RULING PARTY ASSEMBLYWOMAN SAID TO ME THIS MORNING IT WAS A REAL STRUGGLE. AND SHE SAID IT REPRESENTED A DEGREE OF SUCCESS FOR THE SUMMIT.

>> Woodruff: TOMORROW, MARGARET REPORTS ON EDUCATIONAL PRESSURES ON SOUTH KOREAN STUDENTS.

>> Lehrer: NOW, SOME PERSPECTIVE ON HOW THE PEOPLE AND THE GOVERNMENT IN THE UNITED STATES ARE VIEWED IN CHINA. IT COMES FROM LINDSEY HILSUM OF "INDEPENDENT TELEVISION NEWS." SHE HAD A CONVERSATION WITH A GROUP OF AMERICAN STUDIES STUDENTS AT RENMIN UNIVERSITY IN BEIJING.

>> I THINK THAT UNITED STATES IS TRYING TO TRANSPORT ITS OWN VALUES LIKE FREEDOM AND DEMOCRACY TO OTHER PARTS OF WORLD, BUT CHINA, INDIA, CUBA HAVE THEIR OWN SITUATIONS, MAYBE NOT SUIT THOSE VALUES.

>> I THINK THE PROBLEM IS IT MIGHT NOT SUIT CHINA. IF IT IS SUCH A GOOD THING IT MIGHT EVOLVE TOWARDS DEMOCRACY ON ITS OWN.

>> THE MOST WITTY AND TRICKY THING ABOUT AMERICAN GOVERNMENT IS THAT THEY PUT PERSONAL LIBERTY AS MAINSTREAM.

>> IT'S CUTE BECAUSE THE AMERICANS PICTURE AN AMERICAN SOLDIER ON STREET OF IRAQ, SAVING IRAQ PEOPLE FROM HELL. I THINK WHENEVER THERE IS DICTATORSHIP, AS SOMEONE WOULD CALL IT, U.S. TEND TO THINK ITS THEIR JOB TO SAVE THOSE PEOPLE. THEY HAVEN'T REALIZED THAT DEMOCRACY IS ABSOLUTE VALUE IN U.S. BUT MIGHT NOT BE THAT ABSOLUTE IN OTHER COUNTRIES.

>> Reporter: BUT PEOPLE WOULD SAY YOU DON'T HAVE REAL FREEDOM OF SPEECH, SO EVEN IF YOU DID REALLY HATE THE GOVERNMENT YOU STILL WOULDN'T SAY.

>> I THINK CHINESE GOVERNMENT DID MAKE SOME MISTAKE. YOU KNOW LIU XIAOBO? HE GAINED NOBEL PRIZE, HE'S A PRISONER IN CHINA. CHINESE GOVERNMENT REALLY DID WRONG.

>> Reporter: YOU THINK THEY SHOULD NOT HAVE PUT HIM IN PRISON?

>> YES, I THINK YOU COULD FORCE HIM OUT OF CHINA BUT NOT INTO PRISON FOR WHAT HE DID.

>> I TEND TO SEE THIS QUESTION A LITTLE BIT DIFFERENTLY. I WAS IN U.K. THE PAST THREE MONTHS AND I SEE MANY CHINESE PEOPLE THERE. WE HAVE TO, LIKE, FACE ALL KIND OF LIKE CRITICISMS ABOUT OUR GOVERNMENT.

>> Reporter: YOU HAD TO FACE THOSE CRITICISMS? HOW DOES THAT MAKE YOU FEEL?

>> I FEEL IT'S SO UNFAIR BECAUSE I'M INDIVIDUAL, HOW CAN YOU JUDGE ME BY MY GOVERNMENT?

>> Reporter: SO IF THE 20th CENTURY WAS THE AMERICAN CENTURY, IS THE 21st THE CHINESE CENTURY?

>> WHAT I AM SURE IS THAT CHINA WILL BE STRIDING AHEAD AND BECOME MORE POWERFUL AND INFLUENTIAL THAN BEFORE.

>> Reporter: BECOME A SUPERPOWER?

>> I HATE THIS WORD. ( LAUGHS )

>> WHY THIS WORLD ALWAYS WE ARE HOPING FOR ONE OR TWO SUPERPOWER? WE DON'T NEED SUPERPOWERS, ONE MAY BE STRONGER THAN ANOTHER, MORE DOMINANT IN INTERNATIONAL AFFAIRS BUT THAT DOESN'T MEAN IT HAS TO COERCE OTHER COUNTRIES TO DO THINGS THEY DON'T LIKE.

>> POWER IS THE ABILITY TO COERCE OR INFLUENCE OTHERS. RIGHT NOW, WHAT WE SEE IS CHINA CAPACITY NOT POWER. ECONOMICALLY, WE ARE SECOND IN GROSS G.D.P. BUT CHINESE GOVERNMENT IS FACING SO MANY PROBLEMS DOMESTICALLY. OTHERS SEE CHINA GROWING 8% PER YEAR, BUT WHEN CHINESE SEE THEMSELVES THEY SEE UNEMPLOYMENT, THEY SEE INFLATION, THEY SEE THE RISING COST OF HOUSEHOLDS.

>> Reporter: SO YOUR VIEW OF YOURSELVES IS VERY DIFFERENT THAN THE VIEW FROM OUTSIDE? EXACTLY.

>> I JUST THINK IT'S LIKE REAL GAP BETWEEN CHINA AND WESTERN COUNTRIES BECAUSE CHINA IS DIFFERENT, THAT'S WHY I THINK AMERICA IS SO ANTI-CHINA IN SOME OPINION, BECAUSE ITS DIFFERENT.

>> CHURCHILL SAID DEMOCRACY MIGHT NOT BE THE BEST THING, BUT THE BEST CHOICE SO FAR, AND FOR CHINESE GOVERNMENT, THE POLITICAL STRUCTURE IN CHINA MIGHT NOT BE THE BEST THING, BUT IT IS THE BEST THING FOR CHINA, AND WE DON'T SEE ANY POSSIBLE ALTERNATIVES TO THE CURRENT GOVERNMENT SO OF COURSE WE WILL SUPPORT IT. BECAUSE IT IS THE STABILIZER, THE PROTECTOR OF THIS COUNTRY. IT IS SO VAST, IT IS EMBEDDED WITH PROBLEMS, WITH CONFLICTS, WE'RE JUST LUCKY SOMEONE IS TAKING CARE OF IT.

>> Lehrer: THOSE WERE INTERNATIONAL POLITICS STUDENTS IN BEIJING TALKING WITH I.T.N.'S LINDSEY HILSUM.

>> Woodruff: NEXT WE LOOK AT HOW AMERICA'S CITIES ARE FARING IN THIS ECONOMIC CLIMATE. SEVERAL OF THE NATION'S MAYORS MET WITH PRESIDENT OBAMA, VICE PRESIDENT BIDEN, AND NATIONAL ECONOMIC COUNCIL DIRECTOR GENE SPERLING AT THE WHITE HOUSE TODAY. THE ECONOMIC CRUNCH FACING CITIES ACROSS THE COUNTRY DOMINATED THE AGENDA. JOINING US NOW ARE TWO WHO ATTENDED TODAY'S MEETING. MICK CORNETT IS THE REPUBLICAN MAYOR OF OKLAHOMA CITY. AND THE DEMOCRATIC MAYOR OF CHARLOTTE, NORTH CAROLINA, ANTHONY FOXX. GENTLEMEN, THANK YOU BOTH FOR BEING WITH US. TO YOU FIRST, MAYOR CORNETT, TELL US WHAT THE MESSAGE WAS THAT YOU AND OTHER MAYORS BROUGHT THE PRESIDENT.

>> WELL, I THINK OF ACKNOWLEDGEMENT THAT WE HAVE A LOT OF WORK TO DO. UNEMPLOYMENT-- ALTHOUGH IT MAY BE VERY LOW IN OKLAHOMA CITY-- IS STILL HIGH ACROSS THE COUNTRY AND IT'S NOT IN OKLAHOMA CITY'S BEST INTEREST FOR PEOPLE IN THE COUNTRY TO BE SUFFERING SO. AND THERE ARE A LOT OF CITIES ON THE EAST COAST THAT HAVE DEFERRED MAINTENANCE GOING FORWARD AND THEY WON'T BE ABLE TO GET OUT OF THAT MESS ON THEIR OWN.

>> Woodruff: AND MAYOR FOXX, THIS IS THE TIME WHEN THE FEDERAL GOVERNMENT IS AS STRAPPED AS LOCAL GOVERNMENTS ARE. HOW DID THE PRESIDENT RESPOND?

>> WELL, WE HAD A GREAT DIALOGUE WITH THE PRESIDENT TODAY AND I WOULD CHARACTERIZE IT AS A... AN OPEN DIALOGUE THAT WE HAD WITH THE PRESIDENT WHERE HE WAS REALLY LISTENING TO MAYORS TALK ABOUT WHAT WE'RE SEEING ON THE GROUND AND, AS YOU KNOW, JUDY, WE ARE THE BACKSTOP. THERE'S NOWHERE TO GO FROM THE LOCAL LEVEL. WE DON'T PRINT MONEY. AND SO WHEN PEOPLE ARE LOSING JOBS AND THEY'RE FACING CHALLENGES, THEY LOOK TO US TO HELP LEAD. SO I THINK WHAT HE WANTED TODAY WAS TO HEAR FROM THE GROUND WHAT'S HAPPENING AND WE WERE ABLE TO TALK ABOUT THE CHALLENGES OF JOBS AND THE CHALLENGES OF TRYING TO GET THE ECONOMY BACK AND KEEPING COMMUNITIES OPTIMISTIC AT A TIME THAT'S VERY TOUGH.

>> Woodruff: MAYOR CORNETT, YOU MENTIONED INFRASTRUCTURE AMONG OTHER THINGS. DID THE PRESIDENT GIVE YOU THE SENSE... DID HE SAY THAT THAT WAS SOMETHING HE BELIEVES THE FEDERAL GOVERNMENT SHOULD HELP THE CITIES WITH?

>> YES, I BELIEVE HE DOES. AND IT'S A COMPETITIVE NATURE. I THINK IF YOU TRAVEL THE WORLD I THINK YOU'RE GOING TO SEE THAT THERE ARE AIRPLANES AND ROADS AND BRIDGES AND TRAINS THAT ARE MUCH BETTER IN OTHER PARTS OF THE WORLD THAN THEY ARE IN THE UNITED STATES. AND THEN WE HAVE OUR DEFERRED MAINTENANCE. A LOT OF ISSUES. TRANSPORTATION ISSUES AND OTHER IMPORTANT EFFORTS. SO I THINK HE'S FOR IT. NOW, THE QUESTION FOR THE PRESIDENT AND CONGRESS IS GOING TO BE HOW ARE THEY GOING TO PAY FOR IT? BECAUSE I DON'T THINK THE AMERICAN'S APPETITE FOR INCREASING THE DEBT IS THERE BUT THE NEEDS ARE VERY REAL.

>> Woodruff: AND MAYOR FOX, THE SAME THING. I MEAN, DID YOU HEAR A POSITIVE RESPONSE FROM THE PRESIDENT? AND, IF SO, HOW ARE THEY GOING TO PAY FOR IT?

>> WELL, I THINK CLEARLY THERE'S GOT TO BE RENEWED FOCUS ON MANAGING THE COUNTRY'S DEBT AND I THINK THE PRESIDENT ACKNOWLEDGES THAT. AT THE SAME TIME, WE'VE GOT TO CONTINUE BUILDING A 21st-CENTURY COUNTRY. AND I THINK ALL OF US WALKED AWAY FEELING THAT THE PRESIDENT'S AGENDA IS VERY MUCH IN LINE WITH OUR AGENDA ACROSS PARTY LINES FROM A MAYORS' PERSPECTIVE. I THINK MAYOR CORNETT IS EXACTLY RIGHT THAT INFRASTRUCTURE IS GOING TO BE ONE OF THE KEY INVESTMENTS THAT THE FEDERAL GOVERNMENT IS GOING TO HAVE TO KEEP MAKING TO HELP BUILD STRONG CITIES AND THINGS LIKE TRANSIT AND AIRPORTS AND ROADS AND OTHER INVESTMENTS. SO WE'RE GOING TO KEEP WORKING WITH THIS ADMINISTRATION. I THINK ONE OF THE OPPORTUNITYS IS TO MAYBE LOOSEN SOME OF THE RESTRICTIONS SINCE THE CONGRESS IS MOVING AWAY FROM EARMARKS TO ADMINISTRATIVE GRANTS THAT ALLOW MERIT-BASED PROJECTS TO MOVE FORWARD IN THIS NEW ENVIRONMENT IN WASHINGTON. I THINK HOPEFULLY WE'LL SEE SOME INNOVATIVE THINGS LIKE AN INFRASTRUCTURE BANK OCCUR. THAT WASN'T DISCUSSED SPECIFICALLY TODAY, BUT I THINK THE PRESIDENT'S TALKED ABOUT THAT BEFORE.

>> Woodruff: IS THAT SOMETHING THAT CAN HAPPEN, MAYOR CORNETT, IN THIS CLIMATE? WE'RE HEARING FROM MANY OF YOUR FELLOW REPUBLICANS IN THE CONGRESS THAT THIS IS A TIME TO CUT SPENDING. EVEN TODAY WE HEAR SPEAKER BOEHNER SAYING WE STILL NEED TO GET $100 BILLION OUT OF FEDERAL SPENDING THIS YEAR.

>> I THINK THAT WAS THE MESSAGE THAT THE VOTERS SENT IN NOVEMBER. I TELL YOU, ONE OF MY CONCERNS IS C.B.B.G. FUNDS. THOSE ARE DISCRETIONARY DOLLARS THAT HAVE TRADITIONALLY GONE STRAIGHT FROM WASHINGTON TO LOCAL GOVERNMENTS AND I'M AFRAID THEY'RE GOING TO CUT THEM SIGNIFICANTLY. AND TYPICALLY, JUDY, WHEN MONEY GOES TO THE STATES INTENDED FOR THE CITIES IT DOESN'T MAKE IT THERE. WE NEED THOSE C.D.B.G. DOLLARS BECAUSE I THINK MAYORS ACROSS THE COUNTRY WILL SPEND THE DISCRETIONARY DOLLARS TO THE BETTER. OF THEIR COMMUNITY AND PUT PEOPLE BACK TO WORK MORE EASILY.

>> Woodruff: ARE YOU SAYING, MAYOR CORNETT, THAT YOUR REPUBLICAN FRIENDS IN THE CONGRESS ARE GOING TO GO ALONG WITH THIS?

>> NO. I JUST HOPE THE CUTS ARE SMALLER RATHER THAN LARGER SPECIFICALLY C.D.B.G. FUNDS. I THINK THOSE ARE IMPORTANT DISCRETIONARY DOLLARS MAYORS AND LOCAL GOVERNMENTS NEED.

>> Woodruff: SO YOU'RE SAYING THERE WILL BE CUTS BUT YOU HOPE THEY'RE NOT AS BAD AS THEY MIGHT HAVE OTHERWISE BEN?

>> EXACTLY.

>> Woodruff: MAYOR FOXX, THE ONE OF THE THINGS THAT WAS SAID TO THE REPORTERS, ONCE OF YOUR PRINCIPAL FOCUSES TODAY WAS ON JOBS. DID YOU HEAR SOMETHING FROM THE PRESIDENT ABOUT WHAT HE OR WHAT THE TWO... WHAT MAYORS AND THE FEDERAL GOVERNMENT CAN DO TOGETHER TO GET JOBS CREATED IN THIS COUNTRY?

>> WELL, I THINK ONE OF THE THINGS THAT IS NOT A SECRET IS THAT THE PRESIDENT IS REACHING OUT TO THE BUSINESS COMMUNITY AND WORKING WITH THEM THERE'S AN ENORMOUS AMOUNT OF PRIVATE CAPITAL ON THE SIDELINES TODAY ABOUT $1.8 TRILLION OF MONEY THAT'S HELD BY CORPORATIONS THAT IS NOT GOING INTO HELPING CREATE JOBS FOR PEOPLE AND I THINK THIS ADMINISTRATION IS WORKING VERY HARD TO CAJOLE THE PRIVATE SECTOR AND TO PUSHING SOME OF THAT MONEY OUT, INCLUDING THE RECENT TAX COMPROMISE THAT WAS APPROVED IN THE LAME-DUCK SESSION. SO THOSE ARE THE TYPES OF EFFORTS I THINK ARE GOING TO CREATE A CLIMATE IN WASHINGTON THAT GIVE THE BUSINESS COMMUNITY CERTAINTY AROUND CREATING JOBS. I THINK THE PRESIDENT IS VERY CLEAR THAT JOBS IS THE NUMBER ONE FOCUS FOR THIS ADMINISTRATION AND THEY'RE GOING TO CONTINUE WORKING THROUGH WAYS TO DO THAT. AGAIN TODAY I THINK HE WAS LISTENING AT LEAST AS MUCH AS HE WAS TALKING ABOUT HOW WE THINK WE CAN PUSH THE JOBS AGENDA FORWARD AND HE GOT LOTS OF IDEAS FROM PEOPLE.

>> Woodruff: ROUGH MAYOR CORNETT, DO YOU SEE SIGNS IN OKLAHOMA AND OKLAHOMA CITY THAT THE BUSINESS COMMUNITY IS READY TO STEP UP AND DO THIS SORT OF SNING.

>> WELL, WE'RE VERY FORTUNATE. OUR ECONOMY IS STRONG. WE'VE HAD DOUBLE-DIGIT GROWTH HERE FOR SEVERAL MONTHS. WE HAVE THE LOWEST UNEMPLOYMENT IN THE COUNTRY AND OUR QUALITY OF LIFE IS EVER INCREASING. SO WE DON'T HAVE MANY OF THE PROBLEMS THAT AMERICAN CITIES ARE DEALING WITH RIGHT NOW. OUR ECONOMY IS JUST REALLY GOOD WHICH KIND OF HELPS YOU ADDRESS ALL THE OTHER SITUATIONS. WE'RE AN ISLAND IN THAT REGARD. WHEN I COME TO WASHINGTON I SPEAK ON BEHALF OF MANY MAYORS, ON BEHALF OF ALL MUNICIPAL ISSUES, NOT JUST ABOUT OKLAHOMA CITY.

>> Woodruff: AND MAYOR FOXX, WHAT ABOUT YOU? WHEN YOU TALK TO THE BUSINESS COMMUNITY DO YOU GET THE SENSE THEY'RE GOING TO STEP UP IN SOME OF THE WAYS YOU WERE DESCRIBING?

>> WE'RE STARTING TO SEE SIGNS OF IT, JUDY. IN CHARLOTTE WE JUST HAD THE ANNOUNCEMENT OF A MAJOR MERGER BETWEEN DUKE ENERGY AND PROGRESS ENERGY-- TWO LARGE UTILITYS THAT PROVIDE ENERGY IN NORTH CAROLINA-- THAT WILL CREATE THE LARGEST ENERGY UTILITY IN THE COUNTRY ONCE THAT MERGER COMPLETES ITSELF. AND WE ARE NOW 8,500 JOBS IN CHARLOTTE OVER THE LAST YEAR. I THINK SOME OF THE ICE THAT WAS THERE IN THE HEART OF THE RECESSION IS STARTING TO THAW AND WE'RE STARTING TO SEE HIRING ACTIVITY PICK UP. BUT IT'S HAPPENING AT A MORE PEOPLE IN I CAN RATE THAN WE WANT. SO THE FEDERAL GOVERNMENT HAS TO WORK HARD AND I THINK AGAIN THE TAX COMPROMISE WAS REALLY, REALLY KEY THERE. BUT I THINK NOW IT'S MORE OF THE PRESIDENT AND ALL OF US WORKING TOGETHER TO GET OUT AND TALK ABOUT THE CHANGES THAT HAVE HAPPENED IN REGULATORY AREAS BUT ALSO TRYING TO BRING THE PRIVATE SECTOR ALONG AND TALKING AND ENGAGING WITH THE PRIVATE SECTOR ON HOW TO CREATE JOBS.

>> Woodruff: A VERY QUICK FINAL QUESTION TO YOU, MAYOR FOXX. DID THE PRESIDENT GIVE YOU CONFIRMATION THAT CHARLOTTE IS GOING TO BE THE SITE OF THE DEMOCRATIC NATIONAL CONVENTION NEXT YEAR?

>> I'M VERY OPTIMISTIC BUT I GOT NO INDICATIONS TODAY. I DID BRING MY BASKETBALL SHORTS IN CASE THAT HELPED.

>> Woodruff: (LAUGHS) OKAY. ALL RIGHT, I HAD TO ASK YOU ABOUT THAT. MAYOR FOXX FROM CHARLOTTE, NORTH CAROLINA, AND MAYOR MICK CORNETT FROM OKLAHOMA CITY, THANK YOU BOTH.

>> THANK YOU.

>> THANK YOU.

>> Lehrer: FINALLY TONIGHT, IT WAS 50 YEARS AGO TODAY THAT JOHN F. KENNEDY DELIVERED ONE OF THE MOST FAMOUS AND MOST QUOTED INAUGURAL ADDRESSES IN HISTORY. HIS CALL FOR ENGAGEMENT AND PUBLIC SERVICE RESONATES TODAY. HERE'S AN EXCERPT OF THAT SPEECH GIVEN JANUARY 20, 1961 AT THE CAPITOL BUILDING IN WASHINGTON.

>> VICE PRESIDENT JOHNSON, MR. LET THE WORD GO FORTH FROM THIS TIME AND PLACE, TO FRIEND AND FOE ALIKE, THAT THE TORCH HAS BEEN PASSED TO A NEW GENERATION OF AMERICANS BORN IN THIS CENTURY, TEMPERED BY WAR, DISCIPLINED BY A HARD AND BITTER PEACE, PROUD OF OUR ANCIENT HERITAGE, AND UNWILLING TO WITNESS OR PERMIT THE SLOW UNDOING OF THOSE HUMAN RIGHTS TO WHICH THIS NATION HAS ALWAYS BEEN COMMITTED, AND TO WHICH WE ARE COMMITTED TODAY AT HOME AND AROUND THE WORLD. ( CHEERS AND APPLAUSE ) LET EVERY NATION KNOW, WHETHER IT WISHES US WELL OR ILL, THAT WE SHALL PAY ANY PRICE, BEAR ANY BURDEN, MEET ANY HARDSHIP, SUPPORT ANY FRIEND, OPPOSE ANY FOE, TO ASSURE THE SURVIVAL AND THE SUCCESS OF LIBERTY. THIS MUCH WE PLEDGE AND MORE. FINALLY, TO THOSE NATIONS WHO WOULD MAKE THEMSELVES OUR ADVERSARY, WE OFFER NOT A PLEDGE BUT A REQUEST: THAT BOTH SIDES BEGIN ANEW THE QUEST FOR PEACE, SO LET US BEGIN ANEW-- REMEMBERING ON BOTH SIDES THAT CIVILITY IS NOT A SIGN OF WEAKNESS, AND SINCERITY IS ALWAYS SUBJECT TO PROOF. LET US NEVER NEGOTIATE OUT OF FEAR, BUT LET US NEVER FEAR TO NEGOTIATE. LET BOTH SIDES EXPLORE WHAT PROBLEMS UNITE US INSTEAD OF BELABORING THOSE PROBLEMS WHICH DIVIDE US. AND, IF A BEACHHEAD OF COOPERATION MAY PUSH BACK THE JUNGLE OF SUSPICION, LET BOTH SIDES JOIN IN CREATING A NEW ENDEAVOR-- NOT A NEW BALANCE OF POWER, BUT A NEW WORLD OF LAW-- WHERE THE STRONG ARE JUST, AND THE WEAK SECURE, AND THE PEACE PRESERVED. SINCE THIS COUNTRY WAS FOUNDED, EACH GENERATION OF AMERICANS HAS BEEN SUMMONED TO GIVE TESTIMONY TO ITS NATIONAL LOYALTY. THE GRAVES OF YOUNG AMERICANS WHO ANSWERED THE CALL TO SERVICE SURROUND THE GLOBE. NOW THE TRUMPET SUMMONS US AGAIN-- NOT AS A CALL TO BEAR ARMS, THOUGH ARMS WE NEED-- NOT AS A CALL TO BATTLE, THOUGH EMBATTLED WE ARE, BUT A CALL TO BEAR THE BURDEN OF A LONG TWILIGHT STRUGGLE, YEAR IN AND YEAR OUT, REJOICING IN HOPE; PATIENT IN TRIBULATION, A STRUGGLE AGAINST THE COMMON ENEMIES OF MAN: TYRANNY, POVERTY, DISEASE, AND WAR ITSELF. AND SO, MY FELLOW AMERICANS, ASK NOT WHAT YOUR COUNTRY CAN DO FOR YOU; ASK WHAT YOU CAN DO FOR YOUR COUNTRY. ( CHEERS AND APPLAUSE ) MY FELLOW CITIZENS OF THE WORLD, ASK NOT WHAT AMERICA WILL DO FOR YOU, BUT WHAT TOGETHER WE CAN DO FOR THE FREEDOM OF MAN. FINALLY, WHETHER YOU ARE CITIZENS OF AMERICA OR CITIZENS OF THE WORLD, ASK OF US HERE THE SAME HIGH STANDARDS OF STRENGTH AND SACRIFICE WHICH WE ASK OF YOU. WITH A GOOD CONSCIENCE OUR ONLY SURE REWARD, WITH HISTORY THE FINAL JUDGE OF OUR DEEDS, LET US GO FORTH TO LEAD THE LAND WE LOVE, ASKING HIS BLESSING AND HIS HELP, BUT KNOWING THAT HERE ON EARTH GOD'S WORK MUST TRULY BE OUR OWN.

>> Lehrer: YOU CAN WATCH ALL OF KENNEDY'S INAUGURAL ADDRESS ON OUR WEBSITE.

>> Woodruff: AGAIN, THE MAJOR DEVELOPMENTS OF THE DAY: CHINESE PRESIDENT HU CALLED FOR CLOSER COOPERATION WITH THE UNITED STATES AND FOR WORKING TOGETHER TOWARD A GLOBAL ECONOMIC RECOVERY. AT LEAST 51 PEOPLE DIED IN IRAQ IN A SERIES OF SUICIDE CAR BOMBINGS. AND MORE THAN 100 PEOPLE WERE ARRESTED IN NEW YORK AND NEW ENGLAND IN A MAJOR ORGANIZED CRIME BUST. AND TO KWAME HOLMAN FOR WHAT'S ON THE "NEWSHOUR" ONLINE. KWAME?

>> Holman: JUDY HAS FILED A BLOG POST ABOUT THE ANNIVERSARY OF THE KENNEDY INAUGURAL. OUR REPORTING TEAM IN SOUTH KOREA HAS A NEW DISPATCH. IT'S ABOUT THE CAMPAIGN TO STAY FIT AND EAT HEALTHFULLY IN SEOUL. AND FIND A SLIDESHOW OF IMAGES FROM CHINA'S TEN LARGEST CITIES AS WELL AS ALL OF CHINESE PRESIDENT HU'S SPEECH TO AMERICAN BUSINESS LEADERS. ALL THAT AND MORE IS ON OUR WEB SITE, newshour.pbs.org. JUDY?

>> Woodruff: AND THAT'S THE "NEWSHOUR" FOR TONIGHT. I'M JUDY WOODRUFF.

>> Lehrer: AND I'M JIM LEHRER. WE'LL SEE YOU ONLINE AND AGAIN HERE TOMORROW EVENING WITH MARK SHIELDS AND DAVID BROOKS, AMONG OTHERS. THANK YOU AND GOOD NIGHT. MAJOR FUNDING FOR THE PBS NEWSHOUR HAS BEEN PROVIDED BY:

>> OIL COMPANIES HAVE CHANGED MY COUNTRY.

>> OIL COMPANIES CAN MAKE A DIFFERENCE.

>> WE HAVE THE CHANCE TO BUILD THE ECONOMY.

>> CREATE JOBS, KEEP PEOPLE HEALTHY AND IMPROVE SCHOOLS.

>> ... AND OUR COMMUNITIES.

>> IN ANGOLA CHEVRON HELPS TRAIN ENGINEERS, TEACHERS AND FARMERS; LAUNCH CHILD'S PROGRAMS.

>> IT'S NOT JUST GOOD BUSINESS.

>> I'M HOPEFUL ABOUT MY COUNTRY'S FUTURE.

>> IT'S MY COUNTRY'S FUTURE. AND BY THE ALFRED P. SLOAN FOUNDATION. SUPPORTING SCIENCE, TECHNOLOGY, AND IMPROVED ECONOMIC PERFORMANCE AND FINANCIAL LITERACY IN THE 21ST CENTURY. AND WITH THE ONGOING SUPPORT OF THESE INSTITUTIONS AND FOUNDATIONS. AND... THIS PROGRAM WAS MADE POSSIBLE BY THE CORPORATION FOR PUBLIC BROADCASTING. AND BY CONTRIBUTIONS TO YOUR PBS STATION FROM VIEWERS LIKE YOU. THANK YOU. Captioning sponsored by MacNEIL/LEHRER PRODUCTIONS Captioned by Media Access Group at WGBH access.wgbh.org - BEACHES RESORTS IS A PROUD SPONSOR OF "THE ELECTRIC COMPANY," CONNECTING BRIGHT IDEAS AND COUNTLESS OUTLETS FOR HIGH-ENERGY EXCITEMENT. Announcer: FIND YOUR VOICE AND SHARE IT. AMERICAN GREETINGS-- PROUD SPONSOR OF "THE ELECTRIC COMPANY." FROM THE U.S. DEPARTMENT OF EDUCATION'S READY TO LEARN GRANT, AND... - OK. SO HERE ARE YOUR 5 WORDS. A WESTERN IS A STORY SET IN THE WEST WITH COWBOYS AND HORSES. POSITIVE.