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Global Selloff On What China Calls Black Monday; Americans, Briton Honored in France; Migrant Crisis on Macedonia's Border; Chinese Couples Using Americans as Surrogates; North Korea Sends Mixed Messages with Peace Delegation, Calls for War. Aired 8-9a ET

Aired August 24, 2015 - 08:00:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


[08:00:25] KRISTIE LU STOUT, CNN HOST: I'm Krsitie Lu Stout in Hong Kong. And welcome to News Stream. Stock market meltdown: China's steep losses

sends stocks tumbling around the world.

Plus, France thanks the men who stopped a gunman on board a Paris bound train.

And hundreds of people seeking refuge in Europe leave Macedonia after struggling for days without shelter or aid. We'll take a look at their

desperate journey.

Wall Street is bracing for another selloff after stocks in Asia extended the sharp falls of last week. And right now, Dow future are down as much

as 600 points.

So, in Beijing, officials are calling it Black Monday, China's benchmark Shanghai composite shed 8.5 percent, wiping out all gains made this year.

And the contagion of those tanking share prices has spread, as you can see. Europe's major indexes are all down.

Now China's central bank is now front and center as investors wait to see if it will step in yet again to try to stabilize the markets.

Now I talked to CNN's Asia Pacific editor Andrew Stevens to walk us through just how significant these losses are in China and throughout the region.

(BEGIN VIDEOTAPE)

ANDREW STEVENS, CNN INTERNATIONAL CORRESPONDENT: I think Black Monday is actually a fair description in this case. It's one of those terms we owe

viewers I think that Black Monday this time was quite an event. 8.5 percent, and that's the biggest fall since 2007. And it wasn't just China

in isolation, which we often seen.

Look around the region. Take a look at some of these numbers. Hong Kong down more than 5 percent. Tokyo down more than 4 percent. These are big,

big falls, Kristie, all as a result of what was happening in Shanghai down 8.49 percent.

If you look at this, it's interesting, the other story here today is in the past we've seen the government step in to help, right. This is what we

think may have happened here. This is in the afternoon trading. So, they came back from lunch. It spiked a bit. And then it came off once again.

So, it looks like the government sort of stepped in and then said, no, can't do this either. It was a lost cause, or they're thinking -- they're

looking at something else now, something bigger.

LU STOUT: And this is a story that you've been following very closely in the last couple of months. The struggle between the Chinese markets and

the Chinese government. And it seems that the Chinese government isn't winning. What's going on here?

STEVENS: Losing credibility that's what it looks as if is happening in China.

As you say, this has been going on since June -- mid-June when the market spiked. It's down nearly 40 percent since then. And all the way down

China, the government has been putting sort of underpinning it, putting platforms in and actually stopping the fall, but not stopping it enough, it

stops it for awhile and then it starts going again.

It looks like it's realizing that it can't actually stop this. Meanwhile, the economy, the real economy is weakening. And this is an issue. And the

focus now more than likely is going to move away from the markets. I don't think we're going to see 10 percent falls or whatever, they're going to try

and manage it, but let it go down. But focus on the real economy.

LU STOUT: That's right. I mean, that's underlying all these losses that we're seeing throughout the region, is concerns about the Chinese economy,

that it's slowing down faster than expected. What's your read on China's economic picture going forward?

STEVENS: It's not good. I mean, it does look quite clear now that to meet that 7 percent, 6.8 percent target this year is going to be very, very

difficult.

The official numbers are becoming wobblier and wobblier, if you like. People just don't believe the actual headline GDP numbers we are being

given by China are actually true.

I've been speaking to economists today. They say the real growth probably 5, maybe 6 percent at best.

So, the question is what's happening in the real economy as far as jobs are going? At 5 percent growth, are factories actually throwing people out of

work? Are there no jobs around? If that's the case, the government will do a lot. Jobs are critical as we know. People need to be employed.

That's the relationship the government has with its people -- we will give you prosperity.

If they can't do that, they will do what they can.

And they can do a lot. Let's not forget, they have a lot of tools at their disposal. They're fairly blunt instruments. A lot of it involves throwing

a lot of money at the problem. They've done it before. It's created asset bubbles. They don't want to do it again. But if the choice is between

doing that and having an economy with a lot of people out of work, perhaps social unrest, we know what they're going to do.

LU STOUT: Yeah. So much at stake here. China's prosperity and its political stability. Andrew Stevens, thank you very much indeed for that.

(END VIDEOTAPE)

[08:05:01] LU STOUT: Especially hard hit in all this market volatility are China's small investors. Will Ripley spoke to some of Beijing's homegrown

traders who have poured their savings into the market.

(BEGIN VIDEOTAPE)

WILL RIPLEY, CNN CORRESPONDENT: A game of Texas HoldEm outside this Beijing brokerage house. Like the stock market, winning at poker means

knowing when to raise and when to fold. Chinese markets dealt investors a bad hand, many are getting out.

Mr. Yang, you didn't give his first name, says he lost 30 percent of his investment in a single day. He says he's lost confidence in the market,

suffering two huge losses in less than two months.

Mr. Liu (ph) says he bought at the market's peak in June. He thinks the up and down is normal, even though lately it's been mostly down. He won't say

how much he's lost, but he's staying in, at least for now.

In Shanghai, dark faces watched the latest jawdropping cash. 8.5 percent gone in a single day, erasing what was left of this year's gains.

"How can markets drop like this," asks Homei Jin (ph). "We have no interest to invest. What we've earned is all taken away."

It's the worst single day drop since the start of the global financial crisis in 2007.

"Investors have lost confidence after they got no returns," says Mr. Oh (ph).

China's stock market grew rapidly in the first six months of this year, even though the economy was sluggish.

Perhaps the most obvious sign of China's slowdown, stalled construction projects like this one in Beijing, sitting unfinished for about three years

because there just aren't enough buyers.

All of it stoking fears of a China-led global economic slowdown.

"70 percent of investors in China are individuals," says economic columnist Xiao Lei. "And right now, they're devastated."

Millions of individual investors watching their money evaporate.

'It's pretty risky for most Chinese investors," he says. "Most of them put all of their money in the stock market. Once the stock market collapsed,

people panicked.

China's central government has taken drastic steps to stop the bleeding, but dismal trade, manufacturing and auto sales numbers keep pushing the

world's second largest economy down, and also pushing down the number of Chinese investors willing to keep their money in the game.

Will Ripley, CNN, Beijing.

(END VIDEOTAPE)

LU STOUT: Retail investors getting hit hard, really hard, inside China. Now, CNN's Isa Soares has been tracking European markets where stocks

across the continent are trading lower. She joins us now from our London bureau.

And Isa, I mean, Chinese markets in freefall today. That affecting markets across Asia and the selloff continuing there in Europe.

ISA SOARES, CNN INTERNATIONAL CORRESPONDENT: Very much so, Kristie. You saw that carnage in the Asia-Pacific region. Now it seems it's getting

more brutal here in Europe in the last 30 minutes or so.

If we bring up the European market so you can have a look at it, when they opened this morning, they were down about 3 percent, but now that number is

dropping. Look at that, 5 percent the CAT 40, FTSE down 4 percent, and the FTSE has fallen for 10 sessions in a row, that's the longest continuous

decline since 2003.

Xetra DAX there you're looking at almost 5 percent, Kristie. That's one of the biggest losers, in fact, in this year already.

And it's just red. It's just red -- a sea of red across the board.

And the numbers have gotten worse because of what we're seeing out of Dow. The Dow futures 600 points pointing lower open. That's why those numbers

are going worse.

I want to focus on the Xetra DAX. You're looking at it there, because that is heading for a bear market territory. What does this mean? Well, it's

down more than 20 percent from its recent peak. And that recent peak is six months. It was really in April. It's down substantially. And why is

this? Well, it depends on China, Kristie. It's a huge export, exports a lot, and depends on China's growth for it to meet demand, and that's why

they're so concerned about what we're hearing out of China. Manufacturing data we got last week, 77 month low.

Markets really worrying, fearing for the worst, hoping for any sign that China, the People's Bank of China, may intervene this week. That didn't

happen. That's why we saw really carnage in Europe. And now we're expecting bleak numbers come out of the U.S. And that why we're seeing

numbers right across the board much lower -- Kristie.

LU STOUT: Dramatic falls across the world, including there in Europe. And there is so much for global investors to grapple with right now. They have

to consider cheap oil, what's happening in Greece, the fed and its next move. So what degree is China really weighing on everyone's minds? To

what degree is China really the dominant concern for global investors right now?

SOARES: And this is something -- I'm glad you brought this up, Kristie, because this is something I've been asking the guests that we've had on for

the past week-and-a-half on the business viewer being focused on this question, because there's just so many elements to this story.

There's the federal reserve, there's oil, there's also China. And majority of them but one basically said China. China number one concern.

And I think a lot of concern for them, a lot of uncertainty, is the fact there is no clear direction on what happens next in China. Yes, you know,

the economy is slowing. We've seen that from numbers, from the manufacturing numbers, but also there is lack of a certainty in terms of

where the government -- whether the government will step in. The government has the tools at their disposal to actually intervene. It

hasn't done so yet. It doesn't see this as -- sees what is a correction than anything else.

So, I think many people are a bit hesitant really what happens in the next few days. And I think if you're an investor, you're pretty much -- you

have to have nerves of steel, because when I was looking at those markets, European markets in particular, Kristie, and I was breaking the numbers

down, right across the board stocks -- we're talking everything from chemicals, from banks, commodities, every one of them is pretty much down.

The biggest losers today -- I was looking at them -- mining companies. They're the worst off, because of oil, of course, what we've seen in oil

prices, but also because of China.

But China, Kristie, number one without a doubt.

[08:11:12] LU STOUT: Yeah. Given so much exposure to the China market. Isa Soares reporting for us live from CNN London. Thank you, Isa.

Now, let's take you to Lebanon next. And there organizers of a campaign that they're calling, quote, You Stink, they are postponing their protest

over uncollected garbage. The army was deployed in Beirut on Sunday after more than 400 people were injured in dramatic clashes.

Now protesters hurled rocks and set trash on fire. And police responded by firing tear gas.

Now the protests are about much more than just uncollected trash. Now people are frustrated at the government, failing to provide basic needs

like electricity. And now the prime minister is threatening to resign.

Now the government is essentially paralyzed from in-fighting. Lebanon hasn't had a president for a year. And general elections have been

delayed, causing parliament to reappoint itself twice.

By their courage, they saved lives: those words from the French President Francois Hollande as he honored four men who may have stopped terror in its

tracks.

Plus...

(BEGIN VIDEO CLIP)

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: "Look at this girl," he says. "In Syria, she was an angel. Now she is homeless and treated like an

animal."

(END VIDEO CLIP)

LU STOUT: Now a father searching for a better life in Europe finds virtually nothing but misery after reaching Macedonia, what he and

thousands more like him have endured so far.

Also, the mixed messages from North Korea. On one hand, there are scenes like these, and on the other, the country sends envoys who claim to want

peace.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

And we turn now to a story that's being talked about around the world, an act of courage that may have stopped a terror attack.

Now French President Francois Hollande has given his country's highest honor to four men who subdued a heavily armed gunman on board a high speed

train on Friday.

Americans Anthony Sadler, Spencer Stone and Alex Skarlatos have been awarded the legion of honor. Mr. Hollande also pinned the medal on

Britain's Chris Norman who also intervened.

Now CNN's Nic Robertson is following the story. He joins me now live from Paris. And Nic, how did the ceremony proceed earlier today? And what is

the mood in France as it honors these heroes from the U.S. and Britain?

[08:15:04] NIC ROBERTSON, CNN INTERNATIONAL CORRESPONDENT: Well, from the top of the president on down through society here, there's a real sense

that there is a debt of gratitude owed to these four men, that the country needs to thank them. The French president put it this way. He said that

the gunman had about 300, more than 300 bullets with him in those two automatic weapons. That there were more than 500 people on the train.

The ultimate carnage could have been caused by this gunman, is what the French President, if it hadn't been for the action of these men.

So he wanted to honor them by giving them this award and to praise them as well, but also, he said, that they were an example and should be an

inspiration to everyone, because he said -- and here again he quoted one of the young Americans here, Anthony Sadler, he said if you're faced with a

crisis, then you have to react.

I spoke to Chris Norman, the British businessman who received his legion of honor medal from the French President today and asked him how it felt to

receive that award.

(BEGIN VIDEO CLIP)

CHRIS NORMAN, AWARDED LEGION OF HONOR: I am very, very honored, if you like. I -- a little bit difficult to believe that this actually happened.

And I will try to do honor to the medal, but don't forget that this was not my medal, it was the medal of the team, and really Spence and Alex are the

two guys who you should probably thank the most, because they were the first ones who got up and actually did it.

When I heard that they were moving, that gave me the impetus to get up into it, (inaudible) as well.

ROBERTSON: You sound quite emotional today. How do you feel in your heart? In your heart, how do you feel?

NORMAN: How do I feel? I feel happy to be alive. I mean, frankly that was the real thing. And I'm happy that nobody got murdered (ph).

(END VIDEO CLIP)

ROBERTSON: The French president also said that there would be a review of the transport network, security on the transport networks inside France,

the interior minister will be looking into that and meeting with transport chiefs. But he also said again holding these men up as an example that

there is only so much that security services can do that we, all of us, have a responsibility to go -- to be collective. And he pointed to these

men -- British, French, American -- all working together. He said, we're strong when we're united in the face of terrorism, we are not weak, we can

be strong.

So, he really told people that this threat out there is a real threat and people should have in the back of their minds how they might respond to it

and be inspired by these men -- Kristie.

LU STOUT: Yeah, so much gratitude for these four men. They saved so many lives. An inspiration indeed. And yet, Nic, there are these lingering

questions about security. I mean, how is it that the suspect was able to bring dangerous weapons on board a high speed train? And have security

checks been stepped up significantly since?

ROBERTSON: Well, most train stations around Europe don't have airport style security. And when you're inside Europe, on the mainland Europe,

trains don't stop at borders for security checks and passport checks, there's that free movement.

So, it is quite possible to get on board a train with a heavy bag that's got lumpy metalwork inside of it and nobody is going to stop you and ask

you questions.

There are security cameras at station, certainly intelligence authorities around Europe are aware and track certain numbers of terrorists,

particularly when they fly in and out of the country, perhaps not so much when they're traveling by train.

And there has been in recent years increased security in stations, in transport facilities, you know, around Europe. Belgium had a terror threat

against its underground network, subway network, in Brussels a few years ago.

Security has been stepped up, the Belgium police say that they've -- that they've arrested more terror suspects in the past two years than they have

done it in the past 30 years.

The reality is, they say, that there is a threat out there, that it is a very large threat, and it's hard for them to thwart it.

So, security -- so, security at stations, it's not like airports, but there are certainly levels of security that go into trying to protect people.

But the assessment is that perhaps that needs to be reviewed and stepped up at this time, Kristie.

LU STOUT: All right, thank you very much for that security assessment in the wake of what happened earlier this weekend.

Nic Robertson reporting live from Paris. Thank you, Nic.

Now to Syria. And ancient treasures are on the firing line. The country's head of antiquities tells state media that ISIS militants have blown up a

2,000 year old temple in Palmyra. The city is a UNESCO World Heritage Site and is home to well preserved ruins.

ISIS overran the area in May and has already destroyed a number of monuments.

You're watching News Stream. And still to come, refugees risk their lives to get to Europe. And now, they say that they were shocked to find

themselves stripped of basic necessities, even their dignity.

(COMMERCIAL BREAK)

[08:23:50] LU STOUT: Coming to you live from Hong Kong, you're back watching News Stream.

Now Typhoon Goni is now pounding Japan's southern islands. The storm killed some 20 people in the Philippines and forced thousands from their

homes over the weekend. It unleashed floods and landslides. And sparked power outages.

And now to Europe. And thousands of refugees have arrived in Serbia, the latest stop of their desperate journey through Europe.

Now they came through Macedonia, which finally reopened its border with Greece after blocking migrants for days.

Arwa Damon shows us the tense and miserable situation there over the weekend.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN SENIOR INTERNATIONAL CORRESPONDENT (voice-over): It is the pain of parents who thought they were saving their children, hardly able to

comprehend this is the Europe they risked their lives for.

"We are so scared for our kids", Fathum (ph) sobs on her husband's shoulder, as he cradles their five-month-old.

There is little shelter from the torrential rains and no one to help them. What was an easy crossing for refugees most from Syria's war is no more.

Macedonia declaring a state of emergency Thursday, temporarily shut it down, leaving them abandoned, crushed against the razor wire on the Greek

side.

A gentle comforting touch often all a parent can offer their child. Few thought they would be degraded to this degree.

Ibrahim al-Masri pulls his daughter off his shoulders.

"Look at this girl," he says. "In Syria, she was an angel. Now she is homeless and treated like an animal. She is feverish and listless."

(on camera): People here are so angry. So upset. They can't believe that this is happening to them. In Europe, everyone who we've been speaking to

here has been stuck in these conditions for the last four days.

This woman is pregnant. This man has had two heart surgeries. And over there a woman who says her child is also running a massive fever.

(voice-over): Macedonian police open the border for a few at a time. They stumble through, tightly gripping their children's arms. Some collapse and

are carried off. Panic swells. Young men throw themselves across.

Other refugees decide to make a run for it, bolting through any opening they find, darting across the fields, as Macedonian police launch this.

In the chaos, families lose each other. This woman got her son across, but she was pushed back.

"He's gone, I don't know, I can't see him," she sobs. She's not alone in her soul-wrenching agony.

Their hardships were supposed to end in Europe. Instead, along this border, echoes of misery too profound for words.

(END VIDEOTAPE)

[08:27:08] LU STOUT: There are just so many heartbreaking scenes there in that report. That was Arwa Damon reporting. She joins us now live on the

line from southern Macedonia. And Arwa, I mean, you witnessed sheer misery there, refugees, many from Syria, begging to get to the border. What's the

latest. What's the situation for them now?

DAMON: Well, the situation has actually changed quite drastically for the better. The tragedy in all of it is that it took such dire circumstances

to bring about the type of relatively speaking organization that we are seeing right now.

The Macedonians have opened up the border. In fact, they are even facilitating the process for refugees to transit through Macedonia bringing

trains very close to the border itself, setting off trains that are just specifically for the refugees that then drop them off close to the Serbian

border where they continue on foot.

And finally, too, we also have the presence of aid organizations. The problem, of course, is that this does not end here. This is a challenge

that Europe is going to be facing for years to come. It is a challenge that is truly going to require a coordinated effort on the part of all

countries that these refugees are transiting through.

And as one woman was saying, she was an aid worker from Europe, saying the starting point when it comes to a discussion about what to do when it comes

to these refugees, because truly speaking no country wants to deal with them. But the starting point when it comes to the discussion needs to be

the realization that this could be any one of us. We should not take for granted what we have. We should not take for granted the security that we

have in our own respective countries. And we need to understand and relate to these individuals as people who are desperately in need and who are

victims of circumstances over which they have no control.

But even though now these refugees are managing to transit through Serbia, they still face a very difficult journey. Hungary is trying to build a

wall that has barbed-wire along its own border. And then of course from the issue of resettlement -- where to resettle these individuals that are

arriving on the shores of Greece in the thousands and that are transiting across Europe in the thousands, Kristie.

LU STOUT: Yeah, a long-term solution is desperately needed. And Arwa, what you witnessed there on the border is just part of a much wider crisis,

humanitarian crisis. We thank you so much for your reporting. Arwa Damon joining us live on the line from southern Macedonia.

You're watching News Stream. And still to come on the program, smiles and handshakes at the talks between North and South Korea, but Pyongyang puts

out a very different message at home.

And, American women willing to serve as surrogates on in hot demand, especially by couples from China.

(COMMERCIAL BREAK)

[08:32:23] LU STOUT: I'm Kristie Lu Stout in Hong Kong. You're watching News Stream. And these are your world headlines.

Wall Street is braced for another selloff after stocks in Asia extended sharp falls. Dow futures are down as much as 700 points. It comes after

China's benchmark Shanghai composite wiped out all the gains it made this year. And, yes, it has spread to Europe. The continent's major indexes

are all suffering heavy losses. The contagion has also hit India, the biggest fall in seven years down almost 6 percent.

Now, the Americans who may have stopped a terror attack on a high speed train in France, they have been awarded the legion of honor. A British

national who also helped subdue the heavily armed gunman on Friday was given the award as well. A fifth passenger involved will be honored at a

later date.

Now police in Sussex, England say that they expect the death toll from this weekend's air show crash will rise, possibly as high as 20. At least 11

people were killed when a 1950s era military jet plunged onto a busy highway. Now the pilot is in critical condition and his family has issued

a statement saying that they are devastated at the loss of life.

Now South Korean protesters rally near the demilitarized zone, holding signs and chanting anti-North Korean slogans. It comes as South Korea's

president demands an apology from Pyongyang for the landmine blast that badly wounded two South Korean soldiers.

North Korea still denies responsibility.

Negotiations between the two countries are now in the third day as both sides work to stem rising tensions and threats of war. But as Kyung Lah

reports, it is often difficult to decipher the intentions of Pyongyang.

(BEGIN VIDEOTAPE)

KYUNG LAH, CNN CORRESPONDENT (voice-over): This is North Korea's public face, a stab at peace with it's old enemy, South Korea, sending two envoys

into negotiations at the DMZ to cool the latest crisis on the peninsula.

UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)

LAH: But here's North Korea's other face, an about-face from peace.

UNIDENTIFIED FEMALE: (SPEAKING FOREIGN LANGUAGE)

LAH: "Let us destroy the warmongering South Korean puppet military," announces the anchor on North Korean television, broadcast at the same time

as the second round of negotiations between the two Koreas begin. That's followed by news clips of military youth holding up a sign that reads,

"Death to U.S. imperialists," followed by them signing a pledge to destroy America.

This is typical on North Korea's only television channel. But usually, there is some variety in its overzealous programming. Not today.

(SINGING)

LAH: Music videos show Kim Jong-Un being mobbed by his devoted military. This soldier weeping, overwhelmed to be so close to the supreme commander.

(MUSIC)

LAH: Music breaks feature all military orchestras. No children or civilians playing today.

[08:35:20] UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

LAH: The big movie? A brave North Korean commander faces off with the shifty U.S. commander at the DMZ, the Americans encroaching on North Korean

land --

UNIDENTIFIED MALE: (SPEAKING FOREIGN LANGUAGE)

LAH: ...using snipers to ambush and kill North Korean troops. The message, the Americans and South Koreans cannot be trusted.

Fiction playing out in reality at the DMZ. North Korea doubled its artillery forces on the front line says South Korea's Defense Ministry. 70

percent of the DPRK submarines left their bases, apparently activated. All this is happening as the North requested the peace talks from the South.

It's why North Korea watcher, David Kang, says this about the peace talks.

DAVID KANG, NORTH KOREA WATCHER: I don't see any reason that this is any different or the beginning of a major breakthrough. I see this as yet

another of the small cycles of skirmishes that we see between North and South Korea. They just happen with depressing regularity.

LAH (on camera): What Kim Jong-Un says versus what he does is so confusing and so hard to read, and many here in Seoul view it as behavior as usual,

and something that is unlikely to change any time soon.

Kyung Lah, CNN, Seoul.

(END VIDEOTAPE)

LU STOUT: You're watching News Stream. And still to come, a thriving business that spans two continents. Wealthy Chinese families are paying

American women to give birth to their babies.

(COMMERCIAL BREAK)

LU STOUT: Welcome back.

Now, a business is booming in the U.S. state of California, catering to the special needs of clients from China. As Ivan Watson reports, American

women are increasingly being hired as surrogate moms.

(BEGIN VIDEOTAPE)

IVAN WATSON, CNN INTERNATIONAL CORRESPONDENT (voice-over): Eight months pregnant.

UNIDENTIFIED HUSBAND OF AUDRA ANDERSON: She likes it when he kicks.

WATSON: Weeks away from giving birth.

ANDERSON: You saw that one.

WATSON: But this is not your typical pregnancy.

ANDERSON: I know it's not my baby.

WATSON: The child growing inside Audra Anderson will be going to parents in China.

(on camera): Who are the future parents of this child you are carrying right now?

ANDERSON: A Chinese gay couple. And they are the most wonderful people that I know. They are loving and caring. And if I didn't think that, I wouldn't

have given them two wonderful children.

WATSON (voice-over): Anderson's surrogate pregnancy is not unusual. A growing number of women in the U.S. are becoming surrogates for wealthy

Chinese couples who can't have children of their own for biological or legal reasons. Agencies like West Coast Surrogacy in Irvine, California,

are seeing a large influx of customers from overseas. In fact, 40 percent of their clients are from China.

AMANDA YOU, CHINESE LIAISON, WEST COAST SURROGACY: They can choose. We have basic and VIP plans.

WATSON: It costs around $150,000 U.S. to have a child this way.

Hi, this is Amy.

WATSON: The company's founder says that Chinese clients first started knocking on her door around four years ago.

[08:40:07] AMY KAPLAN, FOUNDER & DIRECTOR, WEST COAST SURROGACY: They feel that it's safe here. The laws are completely supportive of their having

children here.

WATSON: Surrogacy is banned in China. Parents can still face fines for having a second child, and Beijing does not recognize gay marriage, all

reasons that attract would-be parents to surrogacy in the U.S.

And there is an added bonus.

KAPLAN: Coming to the U.S., for one, their child will be a U.S. citizen. I'm sure that has some draw to it.

(MUSIC)

WATSON: There are other American companies trying to get in on this growing surrogacy industry. Unlike international adoption, there are very few rules

governing international surrogacy. Some industry insiders are calling for more regulations.

KAPLAN: We have seen agencies who are unethical and have been caught doing unethical behavior. And there is always that fear that they are not

following the standards and the guidelines.

WATSON: Here in a small desert town in southern California, Audra Anderson says she is already considering carrying a third surrogate child. She can

earn from $35,000 to $45,000 for each baby.

(on camera): Is that a contributing factor, being paid for this?

ANDERSON: Not really. I know that we used part of our compensation to go visit the other family in China.

WATSON (voice-over): Anderson, her husband and daughter visited China for the first time in 2014 to see her surrogate child's biological family. The

Chinese family has asked to remain anonymous.

ANDERSON: I got to see the family that I made. And, oh, the twinkle in his eye looking at his little girl, there is nothing better than that. WATSON:

Audra Anderson represents a small but significant swing in international family planning. For generations, wealthy Americans adopted unwanted babies

from China. Now a growing number of wealthy Chinese are hiring American women to give birth to their children.

Ivan Watson, CNN, California.

(END VIDEOTAPE)

LU STOUT: You saw the report, now cue the debate.

Now that is News Stream. I'm Kristie Lu Stout. But don't go anywhere, world sport with Kate Riley is next.

END