DJ - Welcome back to Peking, China. Here's today's update from Carl and Don. Today was a day of preparation, organizing and getting everything in the right order inside the car. Sort of like packing to go on a very long trip. All of the competitors met at the agriculture fairgrounds where the cars are stored on site under local guard and protection. The drivers went through the cars, reorganized all of the contents and took inventory. Many cars were worked on mechanically including the two that showed symptoms of being distressed after coming off the ship trying to get them prepared to get back in the race. We'll have to see how many actually are able to make it to the starting line very early, 6 AM, on Saturday morning.

We've begun to meet some of the other competitors. We've met the Iranian team, six men from Iran, all very young men who we estimate to be between 25 and 35. The Iranians have three cars in the competition called the Hillman which is a former English car, but it's manufactured at an auto plan in Iran. Very cordial, nice people and we look forward to interacting more with them during the course of this journey. The Australians are here with three cars and seven people. One of the cars has great historical significance in Australia. It was a government limousine or a very substantial English automobile called a Phantom which was used for the occasion of royal visitors and heads of states during their visits to Australia. It's a very gorgeous car that was sold at public auction as part of the government getting out of operating a fleet of four automobiles for visiting dignitaries. The last royal to occupy this vehicle was Princess Diana and Princess Di and the car are entered in the competition from Peking to Paris and operated by a husband and wife team from Sydney. There's a team here from South Africa and that team is tomorrow, anxious to hear the results of the choice of the Olympics to be held in the year, I believe 2006 or 2004. Cape Town, South Africa is one of the finalist and is to make the second presentation to the Olympic Committee on Friday, after which the site is to be announced as a part of the bidding process and the South Africans are eager to see if Cape Town might come through as sort of a long shot in that competition. The oldest driver in the event is a gentlemen in his early 70s, I believe 76, driving a very fun and handsome Ford Coupe convertible. We believe that Carl Schneider is the second eldest of the competitors and otherwise there are quite a majority of young and mid-life aged people, both men and women, in the competition. There are three or four all women teams in the competition and we'll tell you more about them as the days come along.

The oldest vehicle in the competition is a 1907 Lafont, and what is unique about this car is that it has a chain drive. A very large chain provides the torque for turning the rear wheels. The chain is very visible on the outside of the chassis and it's of the vintage of the cars that made this original race in 1907. A similar vintage in terms of its design and its features.

Well the competitors today endured three and a half hours of briefings about many details concerning the now very near motor challenge of getting from Peking to Paris. The topics included road surface conditions, which at the moment seem to be OK, although there are some question marks, such as there has been a landslide up on the Tibetan plain and the landslide has closed one of the main routes between Lhasa and Katmandu. However, the road is being cleared and an eye is being kept to see if the landslide will be cleared in time by the time we arrive there, which will be in seven to ten days. But there also is the prospect of continuing landslides as a result of monsoon season rains. We've learned that there is an escape route, so it's called, should the road get permanently blocked for some reason. But the escape route requires a 3,000 mile detour. I've never contemplated a 3,000 mile detour. This particular detour takes one across the far remotest parts of China and down through Pakistan and diverting away from northern India and crossing India into Pakistan. The emergency route would take one along the Kazakhstan border with China and down into Pakistan, should that become necessary. Part of the provisional planning. We are told that there is going to be some extraordinary scenery and some very demanding driving conditions, particularly in the area between Lhasa and Xigaze leaving China and descending down into India. That is thought to be the most difficult and demanding part of this nearly unprecedented trip by this route. In China itself quite a bit of emphasis on the need to avoid any kind of a traffic mishap. Should that happen, it can take as long as an entire day to sort out the reporting and processing of any type of accident no matter what the degree of difficulty. The rules of the road are to give way to other vehicles, bicycles being the main choice of vehicle in rural China. There are estimated to be 100 million bicycles on the streets and highways of China. The traffic system here has a rhythm to it, you might call it the dare system or the give way system, but there is certainly a choreography and an absence of stress and threats from other operators of vehicles. There's a willingness for traffic to blend and flow together. It's rather remarkable to be in it and see how it happens. It's rather unnerving, however, for people who are use to structured rules of the road. Here the rules kind of ebb and flow based on the volume and the circumstances. All is pretty well ready in terms of the logistics and the instructions to the drivers and navigation review, review of all of the rules and regulations of what is a daily clocked competition, journals are kept. There are marshals in 150 control stations between Peking to Paris, to which the drivers must report on a daily basis as they begin and end the day and at various intervals along the route. A rather complex set of rules govern this type of event. When one hears about a race, you think it's about speed and beating another vehicle. It is not about that at all. A European rally involves maintaining very precise time and distance records and having them verified by event officials. There are as many as 50 marshals and controlling staff for this event.

We have some more insight into this remarkable Chinese culture and economy which has undergone a extraordinary transformation over the last decade. We were told today that 80% of the construction cranes for high rise buildings in all of Asia are in Peking at this time where there is a stunning explosion of construction of high story office buildings and apartment houses. 80% of the specialized cranes used for that type of building are thought to be in Peking at the moment.

The Prime Minister of Japan, Hashimoto, is visiting Peking today and for the next three days and the Japanese flag lines the major thoroughfares and Tiananmen Square to welcome the arrival and visit by Japan's leader.

There are reports being disseminated in advance of the Party Congress which begins on September 12th that we've told you about. Those reports sort of highlight some of the reforms and some of the advancements that have occurred in China since the last Party Congress that was held. Today's report was about the employment economy in China and that report says that last year, unemployment was 3% for all of China and that there are employed 680 million people at the end of last year which was up 6% from 1991. There are 31,000 employment agencies, which have mushroomed over the past five years because free enterprise and a socialist economy displaced the collective communist system where previously there was no such thing as an employment agency, all employees worked for one employer - the government. But at the present time there are 31,000 employment agencies here in China. So the economic marvels are measured in many, many ways. We're aware of the economic meltdown in some of the other Southeast Asian economies such as Malaysia and Indonesia, but China seems to be immune from that for many reasons, in part because of the savings rate. China does not borrow from the international monetary funds in the way that these other economies do. China has an absolutely stunning rate of savings, personal savings. We haven't verified the actual number, but we think it's as high as 60% of its GDP is reflected in the personal savings of the people of China. That contrasts with a single digit percentage of the United States and is indicative of why the Chinese economy and the Chinese currency is not subject to the volatility of these other Southeast Asian economies who, in fact, borrow a great deal to support their growth and their currency. In the area of currency, we had a couple of unnerving experiences here where the US dollar is not generally accepted and people really are not inclined to accept the dollar in any sort of a transaction. And in fact, in making currency exchanges, they examine very carefully the validity of US currency including, in particularly, the $100 bill and we had the occasion of having one bill turned over or refused to be accepted in a currency exchange transaction. It was an old $100 bill and had a faded image on it and the Chinese, like so many other countries in the world, including France and Europe, are very suspicious of the integrity of the US $100 bill which was very quietly and non publicly known to be counterfeited throughout the world. In the late 80s, early 90s the world was flooded with counterfeit US $100 bills and to this day, many countries are suspicious of accepting the US dollar in currency transactions and business transactions. One finds that being an American, particularly in China, does not have the standing that you might expect or enjoy in other locations around the world.

We had a very unique experience here at the Beijing Hotel, where they've just installed the Internet into the business office of the hotel. Being able to visit our own Web Site today and to see the many guest comments, including one from my mother, who in her mid 80s is continuing to learn as she inspired me to do throughout my life and she posted a very nice message on the Guest Book of the Internet site, which we want to acknowledge.

Finally, when you think of China, you think of the unique, lovely, and much celebrate panda bear. And there's news to report here about the panda. At a research center in southwest China, the birth of twins occurred over the weekend. The siblings weighed 150 grams and a 130 grams at birth on Friday at the China Giant Panda Protection and Research Center. Mother and cubs are in excellent condition according to the workers. Less than 10% of the male pandas living in zoos or breeding centers are capable of mating and the pregnancy rate among female pandas kept in artificial environments is around 24%. Experts say it's difficult for giant pandas kept in an artificial environment to get pregnant as the females tend to reject the males. Since 1991 the center has artificially inseminated 13 female pandas. 19 cubs have been born but only 14 have survived. That's the news of the panda and that's the news of Don and Carl who are now prepared to travel across China for the next two weeks and to report to you our progress. We're going to be visiting some locations and cities with names that are new to us and we'll be sharing our new found insights into some of those places and names, which include names like Yinchuan and Baotou, and other wonderful local pronunciations of names of far away places here in China and Asia. That's the update for now and our next report will be just before we depart from the Great Wall of China and begin the trip to Paris. We have some new words to share with you and we'll quickly review our notes and see if we can end our report with one of them. I know we were admonished to not expect to be mollycoddled, I believe was the expression, as our British organizers take great delight in exercising the language and mollycoddling will not be tolerated on this journey. We trust that you know or will figure out on your own what that means. Until next time, thanks for coming along with Don and Carl and good-bye from Peking, China.