This is a rush transcript from "America's Election HQ," August 7, 2008. This copy may not be in its final form and may be updated.

HEATHER NAUERT, HOST: NAUERT: When it comes to religion in China, Christianity is booming. Christian churches, once taboo in the communist country, now have reportedly about 70 million members. So is China on its way to accommodating religious beliefs?

Joining me now is the former executive director of the Christian Coalition, Ralph Reed. Hi there, Ralph. Communist country -

RALPH REED, FORMER DIRECTOR, THE CHRISTIAN COALITION: Hi, Heather. How are you?

Video: Watch Heather's interview with Ralph Reed

NAUERT: Thank you. I'm fine, thank you. Communist country has atheism as its sort of official policy, if you will. But now, they have an official Christian church. How did this all happen?

REED: Well, China has always been something of a paradox and a riddle for Americans. I mean, it's an officially communist country that is increasingly embracing capitalism and free enterprise. It is, as you said, an officially atheist country that has arguably one of the most robust churches anywhere in the world. You mentioned the figure of 70 million Christians in China. Some figures go as high as 130 million.

And I think what we're really seeing, Heather, and the Olympics are really putting a spotlight on it, you cannot put the genie back in the bottle once you allow some measure of any kind of liberty. And when you allow cultural exchanges and we have hundreds of thousands of Chinese students who have come here, and then gone back home, there's an exchange of ideas. There's an exchange of Democratic values. The Internet is exploding, and Christianity is part of that flowering of liberty that I don't think the communist government is going to be able to snuff out.

NAUERT: Right. There are two levels of churches there, if you will. There's the official church where the pastors are sanctioned by the government, but then there is this whole system of underground churches and that's believed to be bigger than the members of the official church.

REED: No question about it, and President Bush, who, as you know, gave a very tough speech this week in Thailand, really calling the Chinese government to task, calling on them to respect the striving that is in every person's soul to worship God as he or she understands him to be. He had requested to be able to worship at a house church. There are some estimates that there as many as 25 million people to 50 million people in these home churches. And it was unfortunate that he was denied that opportunity. But if you talk to anybody who has gone to China whether as a missionary or a businessperson or on a cultural exchange, they will tell you, Heather, that particularly in the rural parts of China, the church is literally exploding, and it's in many ways exploding in the open.

NAUERT: But Ralph, it's important to point out that some of these underground churches, the men and women who lead those churches are sometimes apparently harassed. Sometimes, they're arrested. What is that all about?

REED: Well, there is no question about the fact that the Chinese government is extremely worried about where this leads. They worry about a religion displacing the communist ideology, which I think it is. And that's why it's so important for the United States to continually, repeatedly press the Chinese on respect for human rights, democratic values, religious freedom and the dreaded and inhumane one child policy.

So I see good signs, but our government has got to keep the heat on. We have a very complex and complicated relationship with China. I don't believe in isolationism, but I think we need to engage them.

NAUERT: OK. Ralph Reed, thank you - former executive director of the Christian Coalition. Thanks for helping us take a look at all the stuff that's surrounding the Olympics, which includes religion.

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