This is a rush transcript from "America's Election HQ," August 6, 2008. This copy may not be in its final form and may be updated.

HEATHER NAUERT, HOST: NAUERT: If you're heading to the China for the Olympics, don't count on having much privacy there either in public or in private. About 70,000 of Beijing's taxis now carry microphones and the taxis can be tracked by the government using GPS technology. Now, these microphones, by the way, can be turned off and on from a remote location without the driver's knowledge.

So, the question is -- are Chinese authorities using these devices to spy on visitors there for the Olympics?

Joining me right now is Asia expert, Gordon Chang, and he is the author of the book called "The Coming Collapse of China."

Welcome, Gordon. So, what are they looking for? I mean, you know that closed countries tend to be paranoid, but what are they looking for from people?

GORDON CHANG, ASIA EXPERT: They're foreign secrets and technology because China has maintained this program for decades, and although, you know, there has been violence against cab drivers, really what they're doing is they want to know what the people in the backseat are saying and thinking.

Video: Watch Heather Nauert's interview with Gordon Chang

NAUERT: Yes, when you mentioned violence against cab drivers, that's what the government says.

CHANG: Right.

NAUERT: That we are putting these microphones in these taxicabs -- 70,000 -- because we want to protect our drivers from being robbed or something bad happening to them. But, really, you say the whole goal is to pick up stuff, with Americans and every -- any other country are talking about.

CHANG: Well, we know this, because there is also violence against cab drivers in other cities in China and the government doesn't do anything there. You know, it's just a coincidence? I don't think so.

NAUERT: Right.

CHANG: So, you know, that's the reason why I've said (ph) this is part of a spying program to these foreigners.

NAUERT: Unbelievable. But you're not surprised?

CHANG: No, I'm not surprised -- because the government has been doing. Just a couple of months ago, Carlos Gutierrez, the treasury secretary, he had a problem, you know, laptops stolen, you know, blackberries are taken from somebody in England. It's part of a very comprehensive program.

NAUERT: Let's take a look -- Human Rights Watch has come out and they've said something about this. They've said, "This seems to suggest an effort by the police or other security forces to eavesdrop on conversations of passengers, rather than for the immediate safety and security of the taxi driver."

So, really you agree with what Human Rights Watch has said, but is there something really -- something really juicy that they expect to get or that they could get?

CHANG: Well, they've gotten a lot of technology. They've gotten a lot of secrets from foreigners in the past and they've done it in very different ways. What they're doing now is just sort of ramping up their procedures. And so, this is just another iteration of what they've been doing for so long.

NAUERT: OK. To what extent do you think they might be spying on their own people, gathering information so that they can go after them once the media attention turns away from China?

CHANG: Well, they do that. And, of course, the technology that they have imported from foreign countries like the United States for this Olympics are going to be used against Chinese citizens once everyone goes home. So, the legacy of these games are not going to be, you know, what we've like to be -- a more open society. It's going to be an enhanced police state.

NAUERT: Absolutely.

You know, there was also a little controversy today. The U.S. athletes got off the plane -- and, I think, we have some video here -- wearing masks, literally, as they got off the plane going to the airport. And they were forced to apologize. They said, "The wearing of protective masks upon our arrival into Beijing was strictly a precautionary measure. We, as athletes choose to take, and in no wait it was meant to serve as an environmental or political statement. We deeply regret the nature of our choices. Our decision was not intended to insult those who are put forth a tremendous amount of effort."

Basically, the air quality is not good there. Good move on the part of the athletes to jump off the plane and put these masks on?

CHANG: Well, they should. I mean, the air in Beijing is among the worst in the world. And they were too apologetic -- because if anybody should be apologizing, it should be the Chinese for having such a bad environment. I would say.

NAUERT: They were supposed to do more to clean up the air, that's right.

CHANG: They certainly were.

NAUERT: Gordon Chang, we're going to have to leave it there. But the book is called "The Coming Collapse of China," and we appreciate your joining us today. Thank you so much.

CHANG: Thank you.

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