More than 60 years after foreign colonial powers left the bustling hub of Shanghai, China is truly recapturing the wayward city.

Shanghai is playing host to the most ambitious World Expo ever, designed to demonstrate that the country’s communist party leaders are fully in control and the conductors of a carefully scripted ascent to global authority.

The Expo site stretching for several kilometres along the Huangpu River is perceived by many here as a counterpoint to Shanghai colonial legacy, exemplified by the elegant buildings of the historic Bund on the other riverfront.

The local media have been vocal in comparing the Shanghai Expo with the 1970 Osaka Expo that premiered post-war Japan’s rapid development to the outside world, transforming the faraway country into a hot tourist destination.

“The Shanghai Expo is about national rejuvenation in the same way as the Osaka exhibition showed the progress made by Japan in the years after the war,” said an editorial in the ‘China Business News’ daily. “Like Osaka, the Shanghai setting is one of a city at the forefront of economic development and the Expo futuristic buildings symbolise China’s reach for the future.”

Historical parallels are drawn by many here, but mainly behind the scenes. Officially, Beijing intends to use Shanghai for the formal launch of its “public diplomacy” and the Expo as a showcase of the country’s soft power – its culture, design, tourism and hospitality.

“Public diplomacy is a new concept for us,” said Tang Xiaosun, international relations expert with the Foreign Languages and Trade University in Guangzhou. “China is now so much the focus of international attention that we need to make sure we have the means to influence public perceptions abroad ourselves.”

In the past 30 years of rapid economic development, Beijing has relied mainly on its foreign diplomacy for international dialogue and image building. But China’s transformation from a politically isolated country into a fast-rising global player has dictated the need for more astute and diverse exchanges with the international public.

Speaking to the press in March, foreign minister Yang Jiechi said the Expo would be the launch pad for China’s new “public diplomacy”.

“Public diplomacy emerges with the requirements of the time and now it is just the right moment for China,” he said at a press conference during the annual session of the parliament. “We are full of optimism that it can accomplish great things.”

Experts say Chinese diplomats began preparing in earnest for this diplomatic debut after the debacle of the 2008 Beijing Olympic torch’s world relay and the barrage of criticism Beijing received for its handling of the Tibetan riots the same year.

They contend the world’s misconceptions about China have grown since 2003 when Beijing belatedly released information about the extent of the SARS epidemic in the country and let the virus spread unchecked. Since then China’s image has suffered blow after blow as a series of shoddy “made-in- China” consumer goods scandals hit the news.

Recent months have brought more adverse publicity for image-conscious Beijing. In December 2009 China executed a British national for drug smuggling, sparking outrage from British leaders who had appealed for clemency on mental health grounds.

Four executives of the mining company Rio Tinto were sentenced in a Shanghai court to as many as 14 years in jail in March after being convicted of bribery and stealing commercial secrets. Foreign businesses in the country say Beijing has been less welcoming in recent months, restricting access to domestic markets and giving preferences to its own national companies.

China has had to fend off claims that its growing economic power is making it act more assertively on the world stage.

As a descendent of the popular World Fair in the 19th and 20th centuries, the Shanghai expo presents an opportunity for Chinese communist leaders to showcase the country’s soft power.

“By hosting the 2010 world Expo we present China not only as a strong economic power,” Wu Jianmin, a senior Chinese diplomat told the media. Organisers say 189 countries will take part in the six-month extravaganza that opens on May 1. The spectacle is expected to attract 70 million visitors, five million of them foreigners.

Shanghai is estimated to have spent 4.2 billion U.S. dollars on the exposition – double what Beijing spent on the 2008 Olympics – and billions more on an expensive makeover of the city infrastructure.

About 100 foreign dignitaries are expected to attend the event. Leaders, including French President Nicolas Sarkozy, Russian President Dmitry Medvedev, South Korean President Lee Myung-bak and European Commission President Jose Manuel Barroso, will be at the Friday’s opening ceremony.

Chinese historians contend Shanghai had been dreaming to host the Expo for more than a hundred years. In 1894, Zheng Guanying, a well-known Chinese thinker, was said to have proposed the idea of hosting the World Expo in Shanghai in his masterpiece ‘Words of Warning in Times of Prosperity’. Ironically, people on the streets in Beijing each had words of warning about the Expo.

“After the Olympics, Beijing became a very expensive place to live,” said a newspaper kiosk vendor who gave her name as Luo. “Shanghai is impossibly pricey even now – what would it be after the six months of the Expo are over? ”

Courteous and efficient, Xing Xina is dealing with the long queue of bank customers in front of her without a hint of resentment.

Chinese officials are worried about the social cost of the property bubble. Credit: Antoaneta Bezlova/IPS

After all, the air is thick with talk of interest rates and mortgage loans and speculation of the Chinese property market’s hottest commodities. On this busy morning, nearly all customers lining up at the Hong Kong and Shanghai Bank (HSBC) branch that Xing works in are buying houses.

Does Xing own property in Beijing? Her polite smile disappears for a moment.

“Not one of my colleagues here can afford to buy into Beijing’s market,” she says, the grudge in her voice palpable. “We are all renting or living with our parents. But the customers I serve here every day are buying property like mad.”

It is a scene played out throughout the banks in China’s big cities – and a complaint heard more and more often from the very same middle class that Chinese communist leaders are counting on to be their staunchest supporters.

Housing prices in Beijing have now broken all records, rising by 40 percent since 2007. A square metre of residential property in the capital now costs an average of 26,000 yuan (3,800 U.S. dollars), but the average per capita monthly income is only 2,000 yuan (292 dollars).

A recent survey by the Chinese Academy of Social Sciences (CASS) found that 85 percent of urban families could not afford an apartment.

The resentment by the country’s burgeoning middle class over failing to get a share of the economic pie is now on par with the grudge held by many Chinese peasants, who feel cheated out of their land, banned from settling in the big cities and left out of the economic boom.

Yet the social consequences of the runaway housing prices are only part of the problem.

The property bubble poses an international dilemma for the Chinese leadership at a time when it is trying to convince the United States that it is serious about rebalancing its export-driven economy and boosting domestic consumption.

Studies by mainland economists now show that sky-high housing prices are in fact undermining domestic consumption, squeezing cash and savings as people struggle to keep up with the rising costs.

Yin Zhongli, a researcher with the Institute of Finance and Banking of CASS, estimates that over the last 10 years, spiralling house prices have siphoned some 10 trillion yuan (1.4 trillion dollars) out of China’s consumption.

“It is a fortune that has been taken away from consumers and channeled into the real estate,” Yin says. “It is one of the main reasons why consumption accounts for so little of our GDP and why the Chinese economy is so seriously unbalanced.”

Wang Weihua, a real estate agent who had been saving to buy a flat and a car, has given up on becoming a car owner. “I was so hopeful when house prices in Beijing started rising before the Olympics – it meant business for me and more earned commissions,” she says. “But it has all happened far too quickly. Prices are too high. I can now save only for a flat and hope that the market cools down a bit.”

Lately, China’s government has shown signs of alarm over the economic and social implications that exorbitant property prices can have on its monopoly of power and the country’s stability. In the last few weeks, central authorities have rolled out a series of measures aimed at cooling the red-hot market.

They have ordered 78 government-controlled conglomerates, known as ‘yangqi’, that are not primarily engaged in real estate to exit the property market.

The central bank has been told to restrict credit for real estate. And having ordered commercial banks to raise mortgage rates and downpayment requirements for property purchases, Beijing also told provincial and municipal governments to control speculative buying.

For the first time ever, Chinese Premier Wen Jiabao was seen on public television speaking about the need to protect “people’s dignity”. In his government work report at the opening of the annual session of the parliament in March, Wen went beyond Beijing’s pledges to ensure “survival” for Chinese people and called for “social and distributive justice”.

But experts doubt the seriousness of Beijing’s attempts to control the property fever. They say powerful monopolies supported by the communist leadership have been the main beneficiaries of the real estate boom, so that Beijing is unlikely to clamp down too severely and endanger its own revenues. “In many cities, land rights fees account for more than 50 percent of government revenues outside the budget. It is a cash cow for local leaders,” says Yin. If in 1998 – at the start of China’s housing reform, authorities at all levels collected 6.8 billion yuan (1 billion dollars) in fees for transferring state- owned land rights to developers, this sum last year rose to 1.5 trillion yuan (220 billion dollars), according to Yin’s research. Some of the liberal state-controlled newspapers have launched an open attack on the government-controlled conglomerates for speculating and pushing up property prices. “During the recession, these ‘yangqi’ were the main recipients of Beijing’s stimulus money and this money are now fueling the property bubble,” said an opinion piece in the ‘China Times’ newspaper. “Without implementing restrictions on these government companies, the arrival of a just and fair society will be postponed indefinitely.” Exerting control, though, will not be that simple. Many powerful state monopolies are headed by the children of senior Communist Party leaders, called ‘taizi’ or princelings. China may be a one-party state but street talk in Beijing speaks of the rise of the ‘taizidang’ – the princelings’ party – and its growing clout over the Party.

As China moves up in the world and the need for investment in its own infrastructure declines, Chinese investors and financiers are eyeing lucrative contracts in less developed countries, winning bids to build dams, power plants and highways from Burma to Uzbekistan and Angola.

However welcome by local governments this influx of fresh Chinese financing may be, the wave of cheap Chinese labour and investors’ lack of concern for local communities are creating ripples of resentment in recipient countries, and gradually becoming a PR problem for image-conscious Beijing.

When economic historian Qin Hui recently gave a talk on China’s involvement in infrastructure projects in South-east Asia, he described Chinese investors as the new “Westerners” in Laos and Cambodia.

Speaking in Kunming – the centre of much Chinese investment flowing into the Mekong region – Qin said Chinese companies have a tendency to apply the lowest standards they possibly can. “Some companies look to see whether local standards are lower than Chinese standards – if so, they apply local standards,” Qin said.

This has created a lot of complaints about Chinese companies’ wrongdoings, agrees Zhang Xizhen of the School for International Studies at Beijing University. “There are multiple reasons for this: some Chinese companies only focus on profits and have little concern about local peoples’ benefits. On the other hand, the Chinese government has not taken strict measures to check companies’ behaviour but has only encouraged them to ‘go out.'”

While some of the companies that operate in Asia are small and obscure private enterprises, the most important players come from the state-owned sector – they are big, powerful and enjoy strong support from the government and the state banks.

In the first ten months of 2009, Chinese companies completed overseas projects worth 58 billion U.S. dollars, an increase of 33 percent over the same period in 2008, according to data from the commerce ministry.

Flush with cash and backed by an economic “going-out” government strategy, Chinese companies are more daring than ever when contemplating projects in risk places like Burma or Sudan. But the backlash against Chinese investors in some countries like Zambia and even ideological allies such as Vietnam are now sounding alarm bells in Beijing and making policymakers question the behaviour of its state champions abroad.

In Zambia, where China is mining cobalt, the deaths of several local workers in an accident in a Chinese factory in 2006 led to riots and more fatalities. After Chinese investment became an issue in Zambia’s presidential elections, Chinese president Hu Jintao was advised against visiting the country’s copper mines during his state visit to the country in 2007.

In Vietnam, where the communist party rules unrivalled in much the same way as in China, the state leaders have come under fire for undermining the country’s sovereignty by giving Chinese companies too many contracts to mine valuable natural resources.

In a stunning outcome for Hanoi, the environmental lobby and dissidents were joined by the venerated statesman and general Vo Nguyen Giap. The general, who once took his lessons in Marxism and guerilla warfare from Chinese communist leaders, has written several open letters calling on party leaders to scale down Chinese companies’ infiltration of Vietnam.

All these developments have been a matter of concern for Beijing for some time, and observers say Chinese leaders have responded to mend the country’s image and prevent another rise of “China threat” propaganda – particularly in South-east Asia, which Beijing regards as its backyard.

The development of the Mekong water resources in the region has emerged as one of the most sensitive issues between China and its downstream neighbours. China has built three hydroelectric dams on the Mekong (known as the Lancang in China) and is halfway through a fourth at Xiaowan, in the southern Yunnan province. What is more, Chinese investors are involved in scores of hydropower projects in Laos, Cambodia and Burma.

According to Qin Hui, of the 34 planned hydropower projects in Laos, roughly 40 percent are being developed with Chinese investment, while all of the 20 plants planned to be constructed in Burma are being built by Chinese companies.

Both the environmental protection and commerce ministry are reported to be working on guidelines requiring Chinese investors to apply Chinese domestic standards to overseas projects if the host country’s environmental and labour standards are too weak. During their diplomatic tours of Africa and Asia Chinese leaders from party chief Hu Jintao to vice-president Xi Jinping have been calling on Chinese business abroad to comply with local laws and respect local communities.

But, “although owned by the state, Chinese enterprises often operate at arm’s length from the government and do not necessarily follow official policies when they contradict corporate interests,” notes Peter Bosshard, policy director of International Rivers in the winter issue of the ‘World Policy Institute’ journal.

Bosshard, who has been observing the expansion of China’s dam industry overseas, believes that without Chinese funding and technology, many controversial projects in countries such as Burma, Laos and Sudan would not go forward.

But Chinese experts defend Beijing’s record, arguing that China cannot be expected to enforce its own other standards and that only those of the host country apply to infrastructure projects. Shi Guoqing, a resettlement expert who had been studying the Ilisu Dam project in Turkey – one of the most controversial large dam projects nowadays – says resettlement programmes are the responsibility of the host country and not of the developer or the funding agencies.

The Ilisu project, which had been rejected by European export credit agencies and private banks twice, is now reportedly lobbying for support from Sinosure – China’s official export credit insurance agency. Shi, who had been studying the proposed dam for three years, confirms that the project would displace up to 60,000 Turkish and Kurdish people from their land but argues that social resettlement programmes need to be guaranteed by the Turkish government.

“It is hard to expect foreign sponsors to go in and impose their own standards on the host country,” Shi says. As for Chinese funding, he believes that now even commercial Chinese banks like Huaxia bank are developing their own code principles and this would lead to a more unified approach in deciding where Chinese money goes.

Other experts say it is too simplistic to lay the whole blame for Chinese companies’ behavior abroad with the companies themselves. Ding Xueliang, a social scientist with the Hong Kong University of Science and Technology, says big Chinese state-owned companies go abroad only with the blessing of both Beijing and the governments of the host countries.

“If Chinese state companies do something bad abroad, they are indeed regarded as ‘big bullies’, but one needs to remember that the initiative had come first and foremost from the government of the host country. It is more of a government-to-government affair whenever big state companies are concerned,” Ding, who has researched Chinese company’s behavior in Southeast Asia, says.

He adds that Western nations’ reluctance to do business with some rogue countries in Asia has left a huge investment vacuum that Chinese companies are only too eager to fill. “Without competition from Western companies in the region, there is no pressure for Chinese companies whatsoever to improve their corporate behavior,” Ding says.

Economic figures have now confirmed what analysts have long predicted would be the defining event of 2010. After 30 years of spectacular growth, China is poised to overtake Japan as the world’s second largest economy and firmly establish itself as the leading source of global growth.

But the news has raised consternation along with pride at home as policy-makers, experts and ordinary people are piecing together conflicting signs of rapid growth, rising overcapacity, inflated property prices and continuing high unemployment.

While policymakers worry that China’s ascendance would give rise to more expectations of greater global management sharing, observers fret that the country’s economic rebounding over the last year has been accompanied by a very steady nationalisation of industries.

The public, for its side, grumbles that great-sounding economic indicators do not reflect the day-to-day reality for ordinary people.

On Christmas Day China reported revisions to official data that showed its economy was faster-growing and closer to displacing Japan as the world’s number two economy. The National Bureau of Statistics said China’s 2008 gross domestic product was 4.52 trillion U.S. dollars, narrowing the gap with Japan’s GDP of 4.9 trillion dollars for the same year. China’s economic growth for the year was revised to 9.6 percent from 9 percent.

“It is great to hear that China would soon be the economic leader of Asia, but how does this affect us?” asked Cao Jinling, a real estate consultant in Beijing. “I deal in properties and I know that many people are excluded from the property boom. They can’t afford to buy even a single-bedroom apartment outside of the central business area of Beijing. Can we compare ourselves with people in Tokyo?”

China’s extraordinary resilience to last year’s global financial woes has elicited praise from all quarters, but Beijing is increasingly worried that its stimulus measures could inflict long-term side effects on the economy in 2010. To prevent a sharp economic downturn in the beginning of 2009, Beijing implemented a stimulus package of 4 trillion yuan (588 billion dollars), coupled with loose credit policy that has fueled growth but also exacerbated existing overcapacity.

Foreign businesses have warned that the new investments funded by China’s stimulus plan may swamp world markets and lead to a surge in trade conflicts.

“China’s growth model requires that external demand – the European Union and the United States – be able to absorb the overcapacity it produces,” said a November report by the European Union Chamber of China, warning that given the weak economic recovery in the developed countries, this overcapacity was unlikely to be absorbed.

Yet China is adamant that next year, it will continue seeking a bigger share of global exports. “China’s exports in 2010 will grow, and there’s no doubt about that,” vice-minister of commerce Zhong Shan told a forum at the University of International Business and Economics in Beijing Sunday.

Zhong said China has emerged as a “big trading nation,” most likely replacing Germany as the biggest world exporter but it was not yet a “powerful trading nation.” Exports meant growth and growth meant jobs for thousands, probably millions of Chinese people, Zhong said in China’s defence. China’s share of the overall global trade surplus has nearly doubled this year, even if its own surplus has shrunk, reflecting the downturn of other major exporters.

China’s critics have become more vociferous, charging its export-friendly polices and control of its currency, the yuan, have robbed other countries of jobs.

Next year China is likely to feel even more pressure on its currency policies. More countries, including some Asian exporters, have joined critics in the West blaming China’s unofficial policy of repegging the yuan to the dollar since the summer of 2008 for making its products artificially competitive.

But premier Wen Jiabao said Beijing was not likely to yield to pressure on the yuan. Demanding a stronger yuan while adopting trade protectionism at the same time by some foreign countries is meant to arrest China’s development, Wen said Sunday in an interview with the state news agency Xinhua.

“Keeping the yuan’s value basically steady is our contribution to the international community at a time when the world’s major currencies have been devalued,” he added. However, defiant Chinese leaders’ rhetoric may sound they have their hands full handling concerns over the side effects of the government’s drive to support growth such as assets bubble and the danger of inflation.

In the same interview with Xinhua, Wen added that while exiting the stimulus policy prematurely could hurt the economy, Beijing needed to prepare itself for the likely emergence of inflation due to higher global commodity prices and the country’s own money supply growth.

Liu Yuanchun, professor of economics at Beijing Tsinghua University, agreed, saying, “If we continue with the same stimulus measures in 2010, next year will probably be fine but longer-term problems would become more entrenched, and we face a real threat of resurging inflation.”

Experts point out another worrying trend that has emerged as a consequence of the huge stimulus programme. China’s state-owned enterprise that have benefited from Beijing’s 4-trillion yuan stimulus package and the accompanying loose credit policies have encroached on the domain of the country’s private sector.

An investigation by the Economic Observer newspaper this month showed that over the last year a de-facto nationalisation of major private companies has occurred in at least three sectors – coal mines, dairy and steel.

Experts worry that a main engine for growth such as the private sector is now being squeezed out in favour of China’s big state-protected companies.

“It is a real pity that while we keep calling for innovation, our private companies can only rely on stock markets in Hong Kong and New York to realise their dreams for growth,” said Chen Zhiwu, expert on socio-economic policy at Tsinghua University. “China’s own stock markets have for years been the reserved domain of the country’s state-owned enterprises.”

If Asia, already unsettled by China’s economic rise, needed a reminder that economic power would be followed by more political assertiveness, then none was more compelling than Beijing’s unconcealed sway on Cambodia to expel 20 Uyghur asylum seekers over the weekend.

The Uyghurs – a predominantly Muslim minority concentrated in Xinjiang province, an autonomous region in western China – had sought asylum in Cambodia after fleeing Chinese security forces’ crackdown on the region in July. Their forced deportation – at night, on a specially chartered flight to China – came hours before Chinese vice-president Xi Jinping arrived in Phnom Penh on Sunday carrying promises for nearly 900 million U.S. dollars in foreign investment and aid.

“When a member of the Security Council so flagrantly pressures another country to violate its international legal obligations, it’s a matter of concern not just for a handful of asylum seekers but for the world,” said Brad Adams, Asia director of Human Rights Watch, in a statement.

“How to deal with these people is an internal Chinese affair which the outside world has no right to make irresponsible comments about,” China’s foreign ministry spokeswoman Jiang Yu said at a press briefing this week.

The forced repatriation drew heavy criticism, not least because of Cambodia’s history of political terror under the Khmer Rouge when thousands of people fled persecution and were given protection as refugees.

“Hun Sen’s action makes a mockery of Cambodia’s commitment to work with the United Nations High Commissioner for Refugees to protect people who have a justified fear of persecution or torture upon return,” Adams said referring to Cambodia’s prime minister.

Human rights organisations have called on the U.N. to challenge China over the “shocking violations” of international legal obligations. China however, has defended its actions, labeling the asylum seekers suspected criminals. Beijing has also flatly rejected accusations that the deportation was linked to the generous package of aid and investment inked by vice-president Xi Jinping during his visit to Phnom Penh. The total of deals for economic development signed reportedly rivaled the cumulative economic aid offered to Cambodia by Beijing over the past 17 years.

Vice-president Xi Jinping – the anointed heir designate to succeed party chief Hu Jintao – arrived in Phnom Penh fresh from his visits to three other Asia countries, where China’s economic ascent and diplomatic clout was continuously on display.

In Japan Xi was granted an audience with the emperor despite objections by the Imperial Household Agency, which initially turned down the request due to its short notice. In Cambodia he arrived to a lavish welcome and was also granted an audience with the Cambodian king, Norodom Sihamoni.

Appraising Xi’s achievements during his Asian tour, the state-news agency Xinhua said it was a testimony of China’s rising international profile. “With a rising global status and increasing participation in international affairs, China has been producing continuous diplomatic highlights,” it said. “It is going forward with more confidence and proficiency, and is playing an ‘indispensable major role’ on the world stage.”

Some Cambodia watchers, though, saw the deportation ahead of Xi’s visit as a blatant display of Beijing’s increasingly assertive control of the region.

“China is becoming more aggressive in shaping its ‘sphere of influence’ and considers South-east Asia region as its backyard,” said Ou Virak, president of the Cambodian Centre for Human Rights. “This is where they feel that they should be and where they will have most political influence.” He also said the aid extended to Cambodia shows China “understands autocratic governments well.”

“For Cambodia, China represents a counter-balance to western pressure on Phnom Penh’s human rights record,” Ou said. “The west, including the U.S., has been critical of Cambodia’s record and has made aid conditional on Phnom Penh meeting its human rights obligations. But all this is now challenged by China’s ‘no strings attached aid’.”

During Xi’s visit China agreed to offer economic grants and soft loans for the construction of roads, transport infrastructure, communication equipment and irrigation projects. Other deals to be financed by Chinese soft loans include the construction of an electricity transmission loop line around Phnom Penh and various economic and technical cooperation projects.

Xi Jinping thanked Phnom Penh for deporting the Uyghur asylum seekers and described the Sino-Cambodian relations as “model”. China is Cambodia’s largest source of foreign investment, its most generous donor and is believed to be the biggest recipient of land concessions granted by Phnom Penh.

Exiled Uyghur leader Rebiya Kadeer, scorned by Beijing as a separatist, warned China was using its rising economic and diplomatic clout to pressure neighbouring countries to condone its human rights abuses. “The deportation of the Uyghurs in Cambodia is a sign of China’s increasing ability to resist international pressure regarding its human rights violations,” she wrote in the ‘Wall Street Journal’ this week.

In July the Turkic-speaking Uyghurs got caught up in China’s worst unrest since the 1989 Tiananmen Square massacre. The fighting between the Uyghurs and the Han – the ethnic group that makes up 92 percent of China’s population – left some 200 people dead and more than 1,000 injured.

The killings were the culmination of long-standing ethnic tensions between the two groups, extending back to about 1760 in the Qing Dynasty, when imperial China annexed Xinjiang. In 1944, the Uyghurs declared independence for Xinjiang, renaming it East Turkestan – a name many Uyghurs still use.

But when Mao Zedong’s communists took power in 1949, they regained control of Xinjiang and began resettling large numbers of soldiers there. Violence has flared every few years since then, with Beijing cracking down hard each time. After the September 2001 terror attacks on the United States, Beijing has branded dissident Uyghurs as terrorists and traitors.

As western nations and the values of liberal capitalism received a battering in the financial storm, China’s emergence as a pillar of economic stability and growth has fed a new craze in all things Chinese – from language to philosophy and culture.

“We did not have to create demand for China studies and we did not have to embark on aggressive campaigns to promote Chinese language learning,” said Xu Lin, chief executive of the Confucius Institute Headquarters in Beijing. “It is China’s rapid development and the craving of people all over the world to know more about China that is forcing us to expand our network of institutes at such speed.”

Xu Lin spoke at the 4th Confucius Institute Conference held in the Chinese capital last week – an increasingly trumpeted forum showcasing China’s emergence as cultural superpower. The event attracted participants from 87 countries around the world and Beijing had reasons to be pleased.

Five years ago, as part of their effort to project “soft power,” Chinese leaders dedicated a whopping 10 million U.S. dollars to establishing 100 Confucius institutes worldwide by 2010 to teach Chinese culture and language. The drive has paid off lavishly – at the end of 2009 there were 282 Confucius institutes in various countries. Beijing’s main concern has become the huge unmet demand for Chinese-language-tuition in many others.

Officials at the Office of Chinese Language Council International (Hanban) estimate there are around 40 million Chinese language learners worldwide. The latest Confucius Institute Conference focused on efforts to spread Chinese language studies outside of universities into broader local communities.

How to expand the projection of China’s soft power has become a focus of debate among scholars in the country, particularly after Japan and India announced their own ambitious plans to raise their cultural profiles internationally.

In 2007 Tokyo said it would aim to establish a further 100 centres for Japanese language studies worldwide. India is also contemplating a cultural campaign to win followers for its rich cultural traditions.

Some Chinese experts point out that relying only on the promotion of Chinese language studies would hamper Beijing’s reach to expand its cultural impact globally. India, for example, has not only a great cache of philosophy, art and books to tap into but also a vibrant entertainment industry.

China-made cultural products have so far failed the competition, with the trendier pop-culture output from Japan and South Korea leaving Chinese leaders with little option but making Chinese language the core of their “soft power” campaign.

The choice of Confucius as the standard bearer of Beijing’s cultural offensive is not accidental either. Communist mandarins see the ancient philosopher who advocated balance and harmony as the ideal speaker for a newly resurgent China keen on projecting an image of a harmonious and peace-loving country.

The non-profit Confucius institutes have become immensely popular not only in places with long traditions of China studies like Europe and the United States but also in Africa. Since the establishment of the first Confucius Institute at the University of Nairobi in Kenya in December 2005, more learning centres have been set up throughout the continent and nearly 10,000 African students are now learning Chinese.

The transformation of Confucius into an international brand of Chinese language studies is a sign of the revival of interest into Chinese traditional heritage, according to Qu Delin, professor at Beijing Language and Culture University.

“Confucianism has been a pillar of our traditional culture for centuries,” said Qu. “It is the right choice as an emblem for China’s going out.”

Yet the renaissance of Confucian thoughts is a departure from the political tenets of most of the early 20th century when Chinese intellectuals maligned Confucianism as the conservative dogma of imperial rulers. During the Cultural Revolution, Confucianism was again a target of attacks by Mao Zedong’s red guards who destroyed Confucian temple and vilified the ancient sage as a feudalistic lackey.

Xu Lin of the Hanban sees the role of history in Confucianism’s recent revival. “Chinese people had been suppressed by foreign powers for a few hundred years, and as a result, we were afraid to promote the good things from our culture to foreigners,” she told reporters during a press event on the eve of the 4th Confucius conference in mid-December.

“Now it is about time to offer the best of what we have… So, we want to turn our Confucius Institutes into a kind of culture-super-markets, something like (the international chain store) 7/11 for culture.”

Yet while propagating Confucian maxims of keeping “an open mind” and embracing “everything,” Chinese cultural mandarins have been circumspect about allowing other countries to launch equivalent cultural programmes inside China.

“They (the Chinese) have opened more than 50 Confucius institutes in the United States but we are not allowed to open even a bookstore in China,” complained a U.S. diplomat based in Beijing, who requested anonymity.

China is not happy. This is how one of the Chinese state-sanctioned newspapers summed up Beijing’s feelings about the week spent negotiating on climate change in the Danish capital.

After a very public showdown with the United States in the early days of the global climate talks, China found itself attacked by smaller developing countries for benefiting more than anyone else from carbon credit funding. And as the countdown to the end of negotiations began, Beijing was seen deflecting criticism that it was the stumbling block to reaching a deal.

Describing the fighting camps in Copenhagen in terms borrowed from the famous “Art of War of Suntzu,” the ‘China Times’ newspaper said Beijing’s gloom about the talks was growing and there was no sign of any “ceasefire” in sight.

The ongoing United Nations climate change conference in the Danish capital, which began on Dec. 7, is now in its final phase. Within government circles and environmental lobbies alike, there is clear awareness of the importance of China’s role in reaching an agreement.

“This is the first time for China to work on green cooperation internationally,” says Hu Angang, prominent economist and campaigner for low-carbon future. “Beijing knows that if we succeed, then the world succeeds; if China fails, then the world fails.”

The talks have reached an impasse due to long-standing rifts between rich and poor countries, and a fresh division that has emerged among developing countries. China has featured prominently in both standoffs and Beijing appears worried that it is becoming a target of criticism over the deadlock.

“People will say ‘if there is no deal, China is to blame’,” deputy foreign minister He Yafei said in an interview with the ‘Financial Times’ published this week. “This is a trick played by developed countries. They have to look at their own position and can’t use China as an excuse. China will not be an obstacle [to a deal].”

On Tuesday China accused developed countries of backsliding on what it said were their obligations to fight climate change and warned that climate negotiations had entered a critical stage.

In sharp comments made at a press briefing in Beijing, foreign ministry spokeswoman Jiang Yu said there had been “some regression” on the part of developed countries on their position regarding financial support. The change in their position “will hamper the Copenhagen conference,” she said.

China and the United States – the world’s two largest carbon polluters – have waged a war of words at Copenhagen. They have clashed on key issues such as how to share out the burden of slashing greenhouse gases (GHGs) and whether the United States owes developing countries a “climate debt”.

Beijing says western nations have built their prosperity on fossil fuels and need to shoulder the responsibility for reducing the growth of global GHG emissions. The International Atomic Agency – an intergovernmental forum on nuclear energy – however, projects that nearly all the growth in those gases over the next two decades will come from emerging economies and half of it from China.

The United States has rejected the idea of “climate reparations” and questioned the need for China – now the fastest-growing economy in the world – to receive a portion of the rich nations’ funding to help developing countries mitigate climate change.

“I don’t envision public funds – certainly not from the United States – going to China,” Todd Stern, the chief U.S. climate negotiator, told a press briefing in Copenhagen last week. While poorer developing countries still needed western help to nurture clean-energy technologies, this was no longer the case with China, he argued.

China has vowed to reduce carbon emissions per unit of gross domestic product by 40 to 45 percent by 2020, but experts say, given economic growth projections, its emissions could still double compared to 2005 levels.

The country has appeared in Copenhagen championing the interests of the developing nations but it has faced rows among its own lobby. Dozens of the poorest countries led by the tiny Pacific island of Tuvalu have called for mandatory caps on greenhouse gases for major emerging economies such as China starting in 2013.

China has been consistently refusing binding emissions caps for fears it would hurt its spectacular economic rise. It reiterated this position in Copenhagen. But in a gesture aimed at mending relations with its underdeveloped allies, Beijing hinted it was willing to give up its share of funding provided by rich nations to help poorer countries tackle climate change.

“Financial resources for the efforts of developing countries (to combat climate change are) a legal obligation… That does not mean China will take a share – probably not … We do not expect money will flow from the U.S., Britain and others to China,” He Yafei told the ‘Financial Times’.

Analysts believe the statement was a sign of Beijing’s unease over the fragile unity of developing countries and the implications of the row for the progress of the talks.

“The climate talks will display China’s new world view,” insists Qing Hong, researcher with the Centre for China and Globalization, a Beijing-based think tank.

“Contrary to some arguments, China is not always adhering only to its own national interests. Quite the opposite, China will show the international community that in the case of climate change its considerations transcend its national boundaries,” he says.

(*This story appears in the IPS TerraViva online daily published for the U.N. Conference on Climate Change in Copenhagen.)

With low carbon seen as the new buzzword for government promotion and backed by Beijing as the new economic growth engine, China is poised for a green leap forward.

But the political overtones of the drive and the zeal of local governments jumping on the low carbon bandwagon have raised concerns that the new green campaign may result in overcapacity, worsening China’s frictions with its trade partners.

As world leaders get together this week in Copenhagen to discuss the earth’s low carbon future, China is facing warnings that its expansion into green energy may have trespassed certain boundaries.

Last week the European Chamber of Commerce in China warned Beijing on threat of trade backlash. A report issued by the European business group said Beijing’s huge stimulus measures to revive the economy have aggravated the problem of overcapacity, which may result in a new surge of cheap exports. The chamber cited expansion in the wind power equipment as one of the sectors facing severe over-capacity.

In another development, the United Nations stopped approving aid for Chinese wind-power projects, pending determination whether they qualified unfairly.

The ‘Financial Times’ reported that the U.N. stopped accrediting Chinese wind farms this summer on concern that government subsidies were cut to make them eligible for the international body’s Clean Development Mechanism, which allows developed countries extending financing and/or technologies for greenhouse gas (GHG)-reducing projects to developing countries to earn credits for their GHG reduction efforts.

But even before the international community and businesses raised voices of concern, Chinese leaders have begun worrying that the new drive for clean energy is creating an overcapacity that may become a long-term burden for the country.

In July the National Planning and Development Commission, the state top planner, released a circular cautioning against new overheating of the economy. Last month, the State Council, China’s cabinet, announced it was taking measures to limit capacity increases in seven sectors.

“It is not only Beijing that has a low-carbon plan but all 32 provinces in China have their own plans, and sometimes those are more ambitious than the national projects,” says Wu Changhua, Greater China director for Climate Group, a Britain-based non-profit organisation. “They don’t seem to realise that it is not enough just to produce the technology and get the clean energy but that you should be also able to deploy it.”

A low-carbon expo held in Nanchang, the capital of Jiangxi, one of China’s central provinces, last month gave a glimpse of how local governments were vying to embrace the new low-carbon concept.

During the expo Jiangxi provincial government announced that it was cooperating with the Finish government on building a low-carbon eco-city in Gongqing city by the Poyang lake, China’s largest freshwater lake. The city, also dubbed DigiEcoCity, was being planned by a Finish company of the same name, and it was the envy of all other localities.

“The drive for green economy has become totally politicised,” said one of the expo participants who spoke on condition of anonymity. “Every single provincial representative at the expo was courting the Finish architect and inviting him to choose their province to be the next setting for a DigiEcoCity.”

The Finish company has agreed to build another eco-city in east China’s Jiangsu province and has been negotiating with Beijing and Shanghai for more eco-city plans, according to the state Xinhua news agency.

“Having one (such city) is regarded now as a thing of political prestige,” said the participant.

Chinese officials have also approached British businesses for cooperation on building eco-cities with intention to have a score of green model dwellings in China twinned with similar eco-development projects in Britain.

“The danger here is that many (cadres) are following a political momentum but their regions have no facilities and skills to support the implementation of new green projects,” Zhang Yongwei, researcher with a leading think tank under the State Council, told the ‘China Times’ last month.

Zhang cited a survey carried out by a working group of the National People’s Congress on how stimulus money pledged by Beijing was utilised by four provinces. The survey published in late October revealed that only 2.2 percent of the entire amount slotted for investment in technology innovation had been used to that end.

“The central government has said it will support low-carbon economy in a big way, but the implementation on local levels is patchy because many places lack the fundraising capacities and strong enterprises needed to sustain green development,” Zhang said.

The development of wind power is a case in point. In May this year China increased its goal for wind power generation capacity by the year 2020 to as much as 100 gigawatts, from the 30 GW that the central government had set 18 months before.

A report by the Global Wind Energy Council in the summer predicted that China would emerge as the biggest growth market for wind power generating capacity this year, ahead of the United States.

But the wind power sector remains ridden with controversies as government officials seem more interested in meeting capacity targets than ensuring that the generated power flows into the grid. Many installed turbines have been left idle as suppliers have found that power distribution networks were not up to the task of feeding the power to the grid.

Suspicions that Beijing has cut wind power subsidies in order for some projects to qualify for carbon credits and meet green energy targets appear to underpin the U.N. decision publicised last week to stop approving new wind power projects from China.

The jury is still out on what Beijing and Washington achieved during President Barack Obama’s first state visit to China last week. But one trait has emerged more strongly than anything else.

While eager to receive recognition for its star-power economy and financial crisis management, China balked at suggestions of global burden sharing with the U.S. and rejected the possibility that the Group of Two (G2) will play a role in shaping the new world order.

Many other sensitive issues were broached only indirectly during Obama’s stage-managed visit, but on the subject of G2 and acting as U.S. partner in global management, Beijing was more than explicit.

“We do not approve of the notion of G2,” Chinese premier Wen Jiabao said. “China is the world’s most populous developing nation, and we are very conscious of the long way China has to go before it becomes a modernised country.”

Wen went on to praise the importance of U.S.-China cooperation in the current fraught-with-risk international situation, but emphasised that China was going to consider first and foremost its national interests.

“Advocating the G2 is in fact an American strategy, not China’s” said Shi Yinhong, an expert on international relations at Renmin University in Beijing. “The U.S. wants us in a tandem because that way it will be easier to work on all financial and security issues the way they want us to.”

Since the conclusion of Obama’s visit, a string of articles and opinions have appeared in the press appraising the new status quo between the world’s only superpower and the one aspiring for the title. A note of caution has been recurrent in most of them. In a rebuke of proliferate predictions of America’s decline of recent months, experts are now warning that the U.S.’s “era of world dominance” is far from over and China has been misled into believing the opposite.

“We must be crystal-clear that the United States still is and will remain for some time the only superpower in the world. Its supremacy in military, technological and any other area of importance is unrivalled,” said an editorial in the ‘China Business News’ this week. “Those who profess America’s decline are being too rushed.”

Some experts see the rise of the European Union as the only viable threat to U.S. supremacy, and caution that all advances to China made by the U.S. are based on the premises of reluctance to cede international leadership to the EU.

“The last 10 years have been all about U.S. efforts to preserve the dollar’s status as a global currency from the challenges posed by the euro,” said Wang Jian, a well-known expert with China Society of Macroeconomics, in an opinion article published by the same paper. “Washington’s international strategy has been to ‘stir trouble in Europe while keeping Asia stable’. This is why Washington is so keen on drawing close to China and vehemently opposed to Japan’s idea of creating an Asian community without the U.S.,” he argued.

Warnings have been issued that China has done little to loosen the embrace of Chinamerica—the interdependence of the countries’ economies that is often blamed for creating trade imbalances and contributing to the financial crisis.

Since China’s economy continues to be largely dependent on exports, Beijing reacted nervously to suggestions by U.S. officials that the United States was now ready to shrug off its role of insatiable buyer of Chinese goods to save more.

For months now China has been the target of calls from the West to get its huge population to spend more. Chinese leaders have rolled out a series of policies to boost consumption in the countryside, where two-thirds of China’s population live. The results have been negligible.

Wang Jian openly dismissed Beijing’s progress in boosting domestic demand, saying nothing much has changed since the days before the crisis. “Unless China changes the way national income is distributed, domestic consumption will not replace exports as the new economic engine,” he said. Fears that exports may suffer explain Beijing’s refusal to budge at prodding from the U.S., Europe and several Asian countries to let its currency, the yuan, appreciate. Allowing the yuan to rise is seen by many now as China’s due contribution to reversing global trade imbalances. During his visit Obama repeatedly paid tribute to China’s rise as a global power, arguing that its emergence as such gives it a greater share of global responsibility.

But Beijing rebuffed all these calls, saying that in regard to the yuan, its national priorities converged with the world’s best interests.

“We maintained a stable yuan during the financial crisis, which not only helped the global economy but also the stability of the world’s financial markets,” deputy foreign minister He Yafei told journalists just hours after Obama issued his call for “more market-oriented exchange rate over time.”

Feng Danya studied foreign languages. She had hoped to be part of a growing local company and grow with them, she says. But her timing was wrong. She graduated in the summer of uncertainty for the global economy and many Chinese start-ups.

“I now work in an Italian deli shop, selling meat and cheese,” she says downcast. “I’m trying to keep my English up with the foreigners who come to shop here from time to time. I tried many other places where I could at least use my degree, but nothing came through.”

Feng is at least employed. With a monthly salary of 1,400 renminbi (205 U.S. dollars) and an accommodation shared with her parents, she can continue to look for something better while earning a modest living. But many of her university friends are still without jobs, scouring job fairs and talent recruitment centres.

An explosive report released by the Chinese Academy of Social Sciences (CASS) in September said earnings of graduates were now at par and even lower than those of migrant laborers. The news came as a blow to many high-aspiring parents and youngsters in a country that has for centuries prided itself on cultivating elite Confucian intelligentsia.

“What is the point of putting so much effort and time into getting a university degree if at the end all you get is the salary of a migrant worker?” muses Wang Lefu, who studied business management. “One needn’t have bothered with exams and all the bureaucracy.”

Unable to find a job to his liking, Wang is now applying to continue his studies abroad. His parents run their own business and can support his studies in Britain or Australia. “There the education should count for something,” Wang says, adding he hopes to land a job that can take him back to China on a foreign salary. “In a year time the economic crisis should be over and jobs would be easier to get.”

But for China the global economic crisis has exacerbated a serious unemployment crisis that has been many years in the making and that few believe will disappear with the first symptoms of global recovery.

China’s official unemployment rate stands at about four percent. Yet a large group of labourers — the communist state’s 150 million migrant laborers or floating population, as they are sometimes termed here — is not taken into account when unemployment figures are calculated.

When the global financial crisis hit last year — diminishing trade flows and reducing manufacturing orders for China’s factories to a dribble — some 20 million migrants were estimated to have lost their jobs and returned home.

The pressure of resolving unemployment tension in the countryside this year has been made even more difficult for Beijing by its growing pains of finding jobs for the country’s surging numbers of university graduates.

Some 6.1 million graduates entered the job market this summer, 540,000 more than last year. In 2008 the employment rate for graduates was less than 70 percent. This year nearly two million of graduates, many of them postgraduate diploma holders, are expected to be left without job placements.

Students from Guangdong Province, China’s wealthiest region, are so desperate for work that they have been applying for jobs as nannies — and getting rejected, a local paper reported earlier this year. Well-off employers are said to prefer peasant girls with experience instead of English-speaking graduates in business administration.

In its ‘Green Book of Population and Labour 2009′ published last month, the CASS said the lack of trained and skilled workers as opposed to the surging numbers of graduates has led to the emergence of an abnormal trend where graduates are paid the same or even less than migrant labourers.

Beijing, where Feng gets her monthly income of 1,400 renminbi (205 U.S. dollars), is one of the costliest cities in China. But the report found that migrant laborers in southern China’s manufacturing belt could earn up to 1,500 renminbi (220 U.S. dollars) per month.

“It is definitely a trend,” says Cai Fang, fellow at the Research Institute of Population and Labour Economics at CASS. “On one hand it illustrates how our labour market has become more integrated, but on the other hand it tells a worrying story about how fierce the competition for employment has become.”

College graduates are frustrated, but so are their parents. Many of them have invested their life savings in obtaining a university degree for their single children. Not surprisingly, many of them blame the government for putting an emphasis on higher education as a prerequisite for young people to prosper in the 21st century China but failing to provide jobs.

The oversupply of college graduates started in 1999 when Chinese leaders decided to counter some of the effects of the Asian financial crisis by boosting university enrolments. They had hoped that a generation of well- heeled educated urbanites would boost domestic consumption and help reduce China’s dependence on exports.

Enrollment rose quickly, from three percent of college-age students in the 1980s to 20 percent today. The trend coincided with a very public effort by Beijing to begin a process of retooling its manufacture-driven economy into a high-knowledge economy.

But even when the economy was booming and creating more jobs, Beijing was struggling to find employment for its growing number of diploma holders. Many Chinese graduates major in computer sciences, law and accounting, but the real demand was to fill specific technical fields.

The global financial crisis, with its hiring freezes and credit crunch that choked enterprises’ expansion, made a bad situation only worse. At the beginning of this year Beijing issued a call to all levels of government to combat unemployment, particularly among new graduates. 2009 is a year that marks the 20th anniversary of Tiananmen pro-democracy student demonstrations, and Chinese leaders feared graduates’ job concerns might snowball into social unrest.

Even as the global economy shows signs of recovery and Chinese economists speak of “exit” strategies from the crisis, unemployment situation remains grim.

“University graduates and migrant workers are among the groups that have been most severely affected by the crisis,” Yi Weimin, Human Resources and Social Security Minister, admitted at a conference specially convened last month to mitigate the news of the CASS report.

It is high time that young diploma holders lowered their expectations and began to see the potential of many once neglected but well-paid jobs, he told the media. “As a result of the crisis, there will be a change in values for our graduates,” Yi said.

In its latest move to ease graduate unemployment amid the downturn, Beijing has ordered the People’s Liberation Army (PLA) to change its recruitment standards to attract more female graduate students.

A statement issued by the conscription office of the Ministry of National Defence last week indicated that from now on the PLA is going to judge its women recruit candidates on their eloquence, artistic skills and appearance – a sweeping change from previous recruitment standards that emphasised age and height.

*This feature was produced by IPS Asia-Pacific under a series on the impact of the global economic crisis on children and young people, in partnership with UNICEF East Asia and the Pacific.

The summer capital of China’s political intrigue is taking a break from the years of intense infighting and maneuvering that Chinese communist leaders used to engage in while hidden in their secluded villas.

Beidaihe – a seaside resort about two hours’ train ride north of the capital – has surrendered its heavily guarded beaches to throngs of Russian tourists and no longer attracts media attention as the exclusive party resort.

It was here that many important party conclaves were held and some fateful decisions to “stay or go” for political supremos in Chinese communist hierarchy were made before announcing them to the public from the formal party halls in Beijing.

But when the 2,000-odd members of the all-powerful Central Committee of the party convene for their annual meeting next week in Beijing, Beidaihe would be hardly mentioned. Its status as a top leadership retreat has been downgraded by the current party chief, Hu Jintao, who has promoted a more egalitarian approach and wants to nurture the party’s populist image.

The changes the communist resort has gone through reflect somewhat the changes that the world’s largest communist party has seen over the last five years. There are fewer party slogans on its laid-back streets lined up with seafood restaurants and fewer state limousines bringing the whole town to a standstill. And there is a prevailing sense that economic expediency rules the day.

“Back then there were very few foreign tourists and we only served party cadres who had come here for a few days of summer holiday,” says shop owner Li Juanxin whose street corner shop sells parasols, sun hats and local souvenirs made of seashell. “But Russian tourists are good for us – they like shopping and spending money.”

Russia’s proximity to this northern seaside resort has made its newly affluent tourists Beidaihe’s main patrons these days. Russian tour groups have flooded Beidaihe’s once heavily patrolled streets, carousing late at night, crowding its seafood eateries overlooking the beach and forcing the locals to learn a few phrases in Russian.

Nowadays all street signs, shop names and menus are in both Chinese and Russia, reflecting the fact that Beidaihe is no longer immune from the commercial waves of time.

In August when state leaders still visit – if not for secret party meetings then for relaxation – the streets get lined up with police who occasionally stop cars and demand identifications. But Russian tourists take it all in their stride.

“The security reminds me of the old days in the USSR (the Soviet Union),” says Yuri Gregoriev while relaxing on a chaise-lounge on the beach. “But I don’t mind it at all. We all come from different parts of Russia’s far east, and to get to any other beach with similarly good weather and warm sea, we would have to travel a long time.”

“The food is good even if it is not cheap and the locals seem friendly enough,” says Yuri’s girlfriend, Masha. “I sort of like the fact that we are guests of a state leaders’ resort,” she gushes when asked if she minds the intrusive security on the streets.

Chinese people though have more to say about how modifications of party style have not brought the changes they have hoped for.

“I must not complain because our (Beidaihe’s) fortunes have been tied up to the party’s fortunes, but we have not seen much change in the way party leaders deal with corruption and power abuses,” says Lao Luo, chef at one of the seafood restaurants lining the main promenade in town. “Everybody is unhappy about it.”

As if taking cue from the public mood, the annual party meeting to be held in Beijing from September 15 to 18 will focus on fighting corruption in the ranks following a series of high-profile cases that have provoked widespread anger.

A document on ‘improving party building’ will be tabled at the meeting that will lay out policy aimed at helping the ruling communists cope with the demands of China’s development and reform, Xinhua news agency said this week.

“The party should make redoubled efforts to improve the party’s work style, build a clean government and fight corruption,” Xinhua said.

The plenum will be held only weeks before China marks its 60th anniversary of communist rule on October 1 with a grand military parade in central Beijing.

But preparations for the anniversary have been marred by allegations of graft and nepotism among the ruling elite even as Beijing has pulled out all stops to demonstrate its readiness to crack down on abuses.

Last week, Sun Yu, 52, the former vice chairman of the southern Guangxi region, was sentenced to 18 years in jail for taking bribes worth 3.3 million yuan (about 484,000 U.S. dollars) and swindling an equal amount from the regional government.

On Aug. 7, Li Peiying, the former head of the company that owns Beijing Capital International Airport, was executed. Li, 60, was convicted of bribery and embezzlement totaling nearly 109.4 million yuan (16 million U.S. dollars).

In a surprisingly frank editorial this summer, the ‘China Daily’ newspaper suggested that “after 60 years behind the helm and more than 30 years of preoccupation with the economy, the Chinese Communist party needs to take a serious look and adapt to new conditions.”

It added that the rising number of “mass incidents” of social unrest demonstrates an alarming level of public anger with the ruling elite.

In 2007 China reported 80,000 cases of “mass incidents,” involving sometimes up to thousands of people. Most of them stemmed from public anger about illegal land seizures or evictions of villagers by local officials making way for development. The figure for 2005 was a significantly lower 60,000 cases.

“The explosion in numbers of ‘mass incidents’ can be seen as an indicator of the rise of public expectations towards the government,” says Wang Erping, who studies social unrest at the Centre for Social and Economic Behaviour at the Chinese Academy of Science.

The ‘China Daily’ had a proposal for the party plenum: “If the image-sensitive CCP (Chinese Communist Party) can work out some practical cures for such sources of public discontent as corruption, it surely will see fewer ‘mass incidents.'”

By Antoaneta Bezlova
Beijing, Sep 4 2009 (IPS)

Preoccupied with ethnic tensions in the vulnerable areas of Tibet and Xinjiang, Beijing was caught off guard by Burmese military regime’s decision in late August to use force against armed rebel ethnic groups in the country’s north, which resulted into military strife that forced thousands of refugees to flee into China.

While the armed conflict has calmed down, Beijing now faces the possibility of having to cope with two intransigent neighbors on its doorsteps – North Korea in the north and Burma in the southwest.

For many years, Beijing has supplied Burma’s military junta with all means for political survival — security guarantees at the United Nations, arms, investment and trade links, as well as development assistance. In exchange, it has been given access to Burma’s considerable mineral wealth and allowed to become heavily involved in the country’s economic development. Chinese companies now operate across the board in industries from mining and timber to power generation.

So when Burmese generals decided to ignore China’s wishes and launch a surprise offensive to crush the Kokang ethnic rebel group in the border area, it was perceived here as a breach of trust. Chinese diplomats have been involved in quiet negotiations with Naypyidaw, Burma’s administrative capital, urging Burmese junta to resolve the ethnic issue in a peaceful way. The Kokang are ethnically Chinese and speak a Mandarin dialect but have lived for many decades inside Burma.

After the fighting broke, the Chinese foreign ministry issued a muted rebuke of the regime, saying that “both sides were responsible for maintaining stability along the border.” Beijing quickly imposed a blackout on news about the tens of thousands of refugees fleeing across the border, fearing it may be seen as having failed to help them. Along with Burmese-born Chinese refugees, there are hundreds of Chinese businessmen involved in gems, timber and other industries.

“It looks like the junta is becoming a bit uncomfortable at being in Beijing’s pocket, and is trying to rebalance its global ties,” says Ian Holliday, a Burma expert at the University of Hong Kong. “The generals are extremely nationalistic and would prefer to listen to no one. But they have no choice but to take some account of what China wants.”

The problem is that Beijing appears in a quandary as to how to handle the dilemma of choosing between defending the interests of ethnic Chinese inside Burma, and continuing its strategic alliance with the military junta.

Historically, Beijing has supported the armed ethnic rebels. Under Mao Zedong, China aspired to be the leader of the world’s communist revolution and financed and trained long-running insurgences over the whole of South-east Asia. In Burma, it supported the now defunct Communist Party of Burma (CPB), which several times came close to winning power. The Wa and Chinese from the Kokang region were former members of the CPB.

While Beijing has emerged as the junta’s staunchest backer over the last 20 years, some Burmese military leaders remain distrustful of Beijing’s true intentions. The military, which seized power in 1962, has not forgotten the costly struggle it waged against the Chinese- backed Burmese communist party insurgency or the full-scale invasion mounted in 1968 by some 30,000 Chinese troops.

Beijing’s attempt to negotiate political solution to the ethnic issue at the border has been seen as half-tepid embrace of Burmese junta’s efforts to pressure the rebels to surrender their arms before key elections planned for next year. The junta wants to integrate the ethnic cease-fire rebel groups, particularly the Kachin, Kokang and Wa, into a border guard force.

But Chinese experts say Beijing has done enough in providing political cover for the Burmese generals and ensuring their success in the upcoming elections. A multi-ethnic state itself, China would be loathe to see a democratic change on its border that might ignite simmering tensions between the Burmans, Burma’s ethnic majority, and other ethnic groups, which have been clamouring for secession since the end of Burma’s British rule.

In early August, Chinese foreign ministry officials backed the regime’s decision to sentence detained Nobel Peace Prize winner Aung San Suu Kyi – the junta’s main challenge to power– to a further 18 months under house arrest, saying that the international community must respect Burma’s judicial sovereignty.

There are many other countries interested in exploiting Burma’s natural wealth but democratic countries like India did not dare stand behind the junta on that one, says Tan Leshui, an independent observer who had visited Burma many times. What is more, Beijing has done the generals a service by playing the go-between for a peaceful resolution of the ethnic strife along the border.

“Burmese military leaders themselves know that they can’t fight and win against the Wa – they are far too powerful and well armed,” says Tan. Beijing may not be in direct contacts with these rebel groups any more but local Chinese authorities along the border have been negotiating behind the scenes with their leaders to ensure a peaceful outcome, he says.

While embarrassed by the rift that the current conflict has exposed with its long-term protégé, Beijing has bigger concerns on its hands. As communist China prepares to celebrate its 60th anniversary on October 1, Chinese leaders are facing fresh challenges to its monopoly of power from restive ethnic minorities in the far-flung regions of Xinjiang and Tibet.

“Beijing continues to be guided by the principle of non-interference in other countries’ internal affairs,” says Lin Chaomin, an expert on South-east Asia at Yunnan University. “We have too many problems of our own to be able to afford looking after other nations’ problems.”

China’s investments in Burma differ from those of the West with its emphasis on human rights and democracy, argues University of Hong Kong’s Holliday. “Lack of political legitimacy, linked to limited economic development, and the resultant possibility of real instability are the core concerns for Beijing,” he told IPS in an e-mail.

Excerpt:

The story of ethnic strife engulfing China’s far-western province of Xinjiang may have been relegated to the inner pages of the country’s state-controlled newspapers, but this time, the government could barely suppress the outflow of information.

Unlike the Tibetan riots last year, when the media was initially told to suppress the story, the clashes between Han Chinese and Muslim Uyghurs that erupted in the provincial capital of Urumqi on July 5th, was widely reported.

In many ways, this is symbolic of the profound changes taking shape in this fast-developing society, which the communist mandarins can no longer fully control.

Taking cue from the protests in Iran, where the emergence of new media tools like Twitter, Facebook, and You Tube ensured the story is broadcast to the rest of the world, Beijing was eager to put its own version out as quickly as possible.

On July 7th, widely-read local newspapers like the Beijing Youth Daily and the Beijing News published pictures of burned cars, smashed buses and bloodied people in Urumqi. Accompanying reports from the state new agency, Xinhua, claimed the violence that erupted was “a pre-empted, organised violent crime. It is instigated and directed from abroad and carried out by outlaws in the country”.

Beijing has blamed Rebiya Kadeer – a female Muslim American émigré, as well as pro-independence Uyghur groups in exile in Washington, Munich and London for masterminding the revolt from afar.

Even the Southern Weekend – a liberal newspaper based in China’s free-wheeling south, fell in line with the mandated version of events. It devoted a full page to profiling Kadeer, describing her as “the Dalai Lama of Uyghur people”. It spent little effort on probing how more than a hundred people died in a matter of hours in a city swamped with paramilitary police or questioning the officially released number of Han Chinese and Muslim Uyghur victims.

Beijing insists that Uyghurs’ gripes are gripes for independence and has condemned their demands for religious freedom and genuine autonomy as separatist agitation. The Uyghurs – members of a Turkic-speaking group that is culturally, religiously and linguistically different from the Han Chinese — have long complained of the heavy-handed Chinese policies.

Li Wei, an expert on terrorism issues with the Chinese Institute for International relations told the Southern Weekend newspaper that Urumqi riots had the same goal as the Tibetan riots that erupted in the run up to the Beijing Olympics last August.

“This is a provocation by Rebiya aimed at sabotaging the 60th founding anniversary of the People’s Republic of China,” he said. “She has been plotting incessantly and she has been looking for a suitable fuse to fire up unrest in the autonomous region”.

Much of the media has attempted to convey a message of danger from “hostile” elements stirring trouble in the ethnic minority areas and has rallied the nation to stand together in the face of the “threat”. Photos of paramilitary police officers on TV and the newspapers have been interspersed with the coverage of state leaders visiting wounded people in the hospitals and calling for national unity.

But not all the media has lined up behind the official line of reporting. Some business newspapers – widely perceived as operating outside of sensitive topics as national sovereignty — have probed the reasons for the protests beyond the official sanctioned explanation of separatism.

The China Business Journal for instance, carried an investigation into the triggers for the protests and dared to suggest that widening income disparity between the ethnic Han majority and the Muslim Uyghur minority has played a part in the uprising.

Much alike Tibetans, the Uyghurs have found themselves on the fringes of Chinese economic miracle. Hoping to benefit from the economic reforms that Han Chinese spearheaded and introduced through the country, they have instead been margianlised as outsiders in their own homeland witnessing how resources and profits have flown to Han Chinese migrants.

The last census taken in Xinjiang showed that although the nearly 8.4 million Uyghurs are still a majority in their land (they stand at 42 percent of the total), the Han Chinese population has risen to 38 percent.

The Urumqi riots – some of the deadliest conflicts between the two ethnic groups in Xinjiang region since the Chinese communist troops arrived there 60 years ago — started with demands by local Uyghurs for the government to investigate the deaths of two Muslim migrant workers in the southern province of Guangdong.

Violence erupted when police began to disperse protesters, spreading across the capital city of 2.3 million people. The majority of them are now Han Chinese. Sympathy protests followed in the traditionally restive towns of Kashgar and Khotan but also in places as far away as Munich and Istanbul. The authorities claim some 184 people died in the riots, more than two-thirds of them Han Chinese.

While the China Business Journal’s reporting steered clear of questioning the official version of events, it traced the origins of the conflict to a government-sponsored poverty alleviation project. The migrant workers that died in a brawl in Shaoguan, Guangdong province, were part of a labour force export scheme aimed at reducing social tensions in the most remote parts of Xinjiang.

The two Muslim workers were among the 4,100 people from Shufu county under Kashgar city that were “exported” by local authorities to work as migrant labour in the manufacturing hubs of China’s east and south. According to the report, the project had transformed the remote county into a model “labour export” center, attracting some 8,000 recruits since 2008.

“In the poorest areas of China where resources are scarce, labour export is one of the most convenient ways for poverty alleviation,” said Chen Yaogao, social researcher with the Chinese Academy of Social Sciences.

While in most areas, migrant force recruitment is conducted by labour agencies or the companies themselves, in the case of Shufu scheme the recruitment was entirely driven by the government. Local authorities contacted manufacturers in Guangdong and in the eastern coast harbor of Tianjin to find placement for the labourers, and even dispatched local cooks to cater to their food needs.

While sounding positive on the government intention, the paper highlighted the problems of Muslim Uyghurs feeling “resentful” of the wealth and living standards of Han Chinese. The report spoke of the “fragility” of the labour export experiment in ethnic minority areas plagued by poverty.

Electronic media has been even more effective in raising public’s awareness about political and economic inequality between Han and non-Han.

www.uyghurbiz.cn, a Chinese-language website, had emerged as a cyber forum probing Beijing’s minority polices and questioning the wisdom of encouraging the migration of Han Chinese into Xinjiang. The internet forum, founded by Uyghur economist Ilham Tohti, had argued that Beijing’s polices were in need of revision as they had put Uyghurs at disadvantage and alienated them.

After the riots as Beijing tried to silence the forum, the response by online activists was immediate. A lobby of more than 100 Chinese writers and intellectuals published a letter calling for the release of the website’s founder. Ilham Tohti was reported missing from his Beijing home this week and has apparently been detained.

The letter posted online on Monday urged Beijing to reflect on whether its own mistakes caused the unrest in Xinjiang and the anti-government riots last year in Lhasa and other Tibetan communities.

*Asia Media Forum (http://www.theasiamediaforum.org)

The global financial crisis is proving a boon for a resurgent China, which is poised to exert ever greater influence in Southeast Asia.

While drawing neighbouring countries back into China’s economic orbit has been part of Beijing’s strategy for restoring what it sees as the country’s rightful place on the global stage, recent months of recession have furnished Beijing with new opportunities to further its leadership ambitions in the region.

After the political turmoil in Thailand led to the cancellation of an Association of Southeast Asian Nations (ASEAN) summit aimed at tackling the global crisis in April, Beijing made political mileage by inviting regional leaders and chief executive officers to the southern Chinese island of Hainan, where the annual Boao forum this year was billed as a new “platform for emerging economies” to cope with the economic downturn.

With the theme ‘Asia: Managing Beyond Crisis,’ the meticulously organised Boao forum was held as a contrast to the failed Pattaya summit – with China pledging help and leadership to the region.

“Developed economies have long dominated international media,” said Long Yongtu, the forum’s secretary general. “Our aim is to offer a platform for emerging economies to present their voices. This is particularly important against the backdrop of the current financial crisis.”

China’s actions to further its leadership role in the region include a 10 billion U.S. dollar investment cooperation fund and an offer of 15 billion dollars in credit to its Southeast Asian neighbours. These are aimed at helping countries weather the current crisis. The fund will finance infrastructure development linking China and its neighbours while the loans will be offered as rescue packages over the next three to five years.

Chinese Premier Wen Jiabao pledged that China would take an active role in pursuing closer economic and trade cooperation in the region. “The fate of all nations is tied together. No one is immune from the global financial crisis and is able to conquer it alone,” he told the forum.

Wen Jiabao also vowed that Beijing would encourage trade settlement in Chinese yuan with neighbouring countries to help ease foreign-exchange shortages and aid bilateral trade and investment. Beijing has already signed currency swap agreements with Hong Kong, Indonesia, Malaysia and South Korea this year.

At the forum, Chinese economists promoted the use of the yuan as a regional currency while at the same time blaming the toll of the global economic crisis in Asia on the region’s high degree of dependence on the U.S. economy.

“Asia is heavily dependent on U.S. markets partly because of the U.S. dollar’s role as an international currency,” Fan Gang, a leading Chinese economist, said at the forum. “America’s attitude in the past has always been that: ‘this is our currency, but it is your problem’. Asia, however, is now in a position to raise demands and choose its foreign exchange reserve currencies.”

Commentators in the mainland press have called on Chinese leaders to extend a helping hand to neighbouring Asian countries in order to achieve greater trade diversity while using regional markets to absorb excess manufacturing capacity at home. As many neighbouring economies are undergoing a flurry of new construction projects, investment is expected to create more employment chances for China’s workers.

“Along with the World Bank and other financial institutions, China should use part of its enormous reserves to help developing countries with the hope of promoting its own development and enhance its image as a responsible world power,” Ding Yifan, researcher with the Development and Research Centre under the State Council – China’s cabinet – wrote in the newspaper ‘China Daily.’

Ding Yifan noted that by providing capital to the U.S. and by buying its government treasury bonds, China has been blamed for its “excessively” high savings rates and for causing the credit bubble.

“It [the U.S.] is really an unreasonable debtor,” Ding wrote. “If we invest our capital in infrastructure programmes of developing countries, there will be no such blame.”

The Mekong countries have been a particular focus of attention for China as it tries to further establish itself in Asia. Along with other proposals, Beijing has announced 270 million yuan (39.7 million dollars) in aid to Burma, Cambodia and Laos, and a donation of 300,000 tonnes of rice to an emergency East Asia rice reserve – boosting food security in the region.

“Stressing the Greater Mekong sub-region area is an important part of China’s whole periphery strategy of nurturing neighbouring friendship,” said Zhang Xizhen, professor at the School of International Studies of Beijing University.

A thousand years ago, the modern Chinese province of Yunnan was the centre of the so-called Southern Silk Road, through which was transported tea, salt, spices and medicinal herbs between China, Tibet and India. Through trade and diplomacy, Chinese power spread deep into the Mekong region.

Today the countries that are bound by the Mekong River – Burma, Cambodia, Laos, Thailand and Vietnam – offer China’s southwestern regions the chance to catch up economically with the more prosperous provinces of the country’s east coast. The two Chinese provinces within the Mekong region, Yunnan and Guangxi, are being groomed for central roles in China’s plan to revive its influence in Southeast Asia.

Kunming, the capital of Yunnan, would be the Chinese terminus of two proposed pipelines – a gas pipeline from central Burma, and an oil pipeline from the Burmese port of Sittwe, which would create a route for Middle Eastern crude and bypass the strategically vulnerable Malacca Strait shipping route.

Guangxi -which has the advantage of being located near the economically vibrant Pearl River Delta in neighbouring Guangdong province – is focusing on increasing the seaborne traffic through the Tonkin Gulf.

Central and local government investment will finance infrastructure in the capital city of Nanning and along the coast – aiming to increase Guangxi’s access to Mekong region markets and those of Indonesia, Malaysia and the Philippines – creating a new channel for goods to flow between southwest China and ASEAN.

Cooperation with other Mekong countries is important, not only as a way of boosting foreign trade and development in southwest China and redressing the country’s imbalanced economic structure, but also as a diplomatic tool, according to Zhang Xizhen.

“Through cooperation with these countries, China can set up an example of a ‘win-win’ partnership to prove its peaceful rise to other ASEAN members and the world, and to counter the spread of ‘China threat’ theory,” he said.

(*This story was done as part of the Imaging Our Mekong media programme.)

Chem Hout sits at the Maxxi coffee shop on a busy thoroughfare in this rural town of western Cambodia, waiting for the school bus to drop off his nine-year-old son. When the mini-bus eventually pulls by, it carries the Chinese characters for the local Chinese bilingual school – the enviable choice of Chem and other parents who can afford to send their children there.

“It does cost more than the state school (where tuition is free),” admits Chem, who runs his own eatery in Sisophon. “But I like the Chinese and I wanted my son to study their language. I hope he can go to China one day.”

It is hard to question the wisdom of Chem’s decision, as the best hospital facility and several clinics in town are also Chinese-run. Chinese money has gone into a couple of language training schools, which take in not only Cambodian Chinese but increasingly ethnic Khmer pupils too.

After a period of prolonged repression, China’s presence in Cambodia is on the rise and traces of this in the impoverished countryside are remarkable. While Japanese and South Korean investors have been pouring money into real estate projects in Cambodia’s up-and-coming capital Phnom Penh, China has sought to combine an influx of state and private investments with a sizable chunk of aid that is now transforming swathes of Cambodia’s hinterland.

“It is remarkable in a way, but it is also a revival of a longstanding tradition of Chinese people providing services to Cambodians. In the old days Chinese merchants were buying and selling Cambodian farmers’ products,” says Lao Mong-hay, a Cambodian-Chinese and former director of the Khmer Institute of Democracy in Phnom Penh.

To Khmer people, China always appeared a faraway giant, Lao muses, and since there was no historical incidence of wars, Cambodians did not harbour negative sentiments toward the Chinese. Animosity was mostly reserved for Cambodia’s more belligerent neighbour to the east – Vietnam.

Yet China has played a sinister and covert role in Cambodia’s turbulent past.

Beijing was a generous and dedicated patron of Pol Pot’s Khmer Rouge regime from its inception as a rebel group in the 1960s through its grisly 1975-1978 rule, during which a quarter of Cambodia’s population was killed. This support continued even after Vietnamese forces ousted the Khmer Rouge in 1979, when it continued to survive on the fringes of the traumatised society and operated from jungle camps along the Thai border.

Fearing a Soviet-backed Vietnamese expansion in Indochina, Beijing trained the Khmer Rouge guerrillas and supplied them with arms, food and technical support. According to Lao Mong-hay, who now works as a senior researcher for the Asian Human Rights Commission, China donated at least two billion U.S. dollars to the movement, half of it after Vietnamese forces ousted the Khmer Rouge and evidence of Pol Pot’s genocidal rule was made public.

Not a single official media outlet in China has reported on the ongoing trial of former Khmer Rouge leaders, which after 30 years of anguished waiting opened in Phnom Penh in late March. Five ageing Khmer Rouge figures are to be tried on charges of crimes against humanity and murder in cases that are supposed to last until 2012.

The most notorious one – Kaing Guek Eav, known as Comrade Duch, is responsible for the torture and killings of up to 14,000 men, women and children under his watch at the Khmer Rouge extermination centre S-21 in Phnom Penh.

“It is misguided to believe that China supported the Khmer Rouge in their internal affairs,” says Zhang Xizhen, South-east Asian researcher at the School of International Studies at Beijing University. “Premier Zhou Enlai was ill in a hospital and still tried to persuade them not to repeat the mistakes that China had made before, but they did not listen.”

“Although China could not accept what they were doing domestically, it could not interfere directly in their internal affairs,” Zhang says in defence of China’s record. He insists Beijing had no other choice but to support the Khmer Rouge’s foreign policies because they were the only “force of resistance against Vietnamese expansion in Indochina” and that constituted a “serious threat to China”.

But numerous records detail that throughout the time that Pol Pot ruled Cambodia, Chinese advisers – perhaps numbering around a thousand – played an important role within the country. They remained important even as, in a twisted irony, the regime’s distaste for ethnic Chinese living in Cambodia soon deteriorated into horrific ethnic cleansing.

Today, even as the Khmer Rouge trials proceed in Phnom Penh, China’s role in Cambodia’s past is mentioned little, if at all.

“The Khmer government never brings up Chinese involvement in Cambodia’s past,” says Ou Virak, president of the Cambodia Centre for Human Rights. “China is our biggest investor and donor and the number one recipient of land concessions. Both countries want to sweep the past under the carpet.”

According to the Cambodian Investment Committee, China has topped the list of foreign investing countries for the last 14 years, with a total amount of 5.7 billion dollars at the end of 2007. Beijing has promised Phnom Penh an additional 257 million dollars of aid for 2009.

But China’s largesse does not come without strings, asserts Ou Virak.

“The Hun Sen government is acting as Beijing’s spokesperson,” he says, referring to Cambodia’s prime minister. “They are keen on emphasising America’s role in aiding the Khmer Rouge to seize power because it helps China keep the United States at bay in ASEAN (Association of South-east Asian Nations).”

As part of its Vietnam campaign of the late 1960s up to the early 1970s, the U.S. military bombed Vietnamese sanctuaries in Cambodia, leading to many thousands of civilian deaths. The U.S. aggression aided the Khmer Rouge to rally national support in the name of fighting foreign imperialists, and paved the way for its ascent to power. “Both China and the Untied States are culpable,” says Theary Seng, executive director for the Cambodia Centre for Social Development. “It is also revisionist on China’s part to try and repudiate its role in the Khmer Rouge because it contradicts historical evidence.”

An apology and a trust fund for Khmer Rouge victims would be an appropriate way for China to close that page of history and make financial amends, she says. “All these big investments and generous donations – they are all very well but Cambodian people need to be told that they are entitled to them,” Theary Seng adds.

(*This story was written for the Imaging our Mekong Programme coordinated by IPS Asia-Pacific)

By Antoaneta Bezlova
PHNOM PENH, Mar 31 2009 (IPS)

Theary Seng, orphaned by the Khmer Rouge, believes in the invisible bonds that suffering weaves among people. She calls it the “fellowship of suffering”.

Theary Seng Credit: Antoaneta Bezlova/IPS

When Theary started writing the story of the tragedy that befell her family, it was a quest for personal closure. But it has grown to be a powerful tool to communicate with other Cambodians because, as she says, “every person in Cambodia is scarred”.

When friends in the United States – where Theary arrived after a long journey through gulag prisons and refugee camps – remarked that her story was “extraordinary,” she had to counter that by saying it was just one of hundreds of thousands that unfolded during the collective insanity that gripped Cambodia under the 1975-1979 rule of ultra-Maoist Khmer Rouge.

A fifth of the country’s population, some 1.7 million people, had been executed or tortured or starved to death.

Theary was just a toddler when the Khmer Rouge executed her father. A few years later, she woke up in her prison cell one morning to find that her mother had disappeared too, taking away the last threads of childhood’s “dreamy quality”.

Thirty years later, the moment of justice finally seems to have arrived.

As the Khmer Rouge tribunal hauls up this week the regime’s chief torturer, Kaing Guek Eav or Duch, to answer charges of crimes against humanity and murder, Theary is among the killing fields’ orphans seeking justice for the deaths of their parents.

Pol Pot, the murderous regime’s chief leader, is dead but four other key members of the gruesome movement, all now in their late 70s and early 80s, have been indicted.

Among them is Khieu Samphan, the Khmer Rouge’s president and Pol Pot’s most faithful lieutenant – the “public face of the regime,” whom Theary holds accountable for the deaths of her parents.

IPS Correspondent Antoaneta Bezlova caught up with Theary, author of the memoir (‘Daughter of the Killing Fields’ Fusion Press 2005).

IPS: Why was it important to write your family history? Theary Seng: The book is a consolidation of my personal memories as a child. The memories were fragmented but pieced together through talking with my relatives. Cambodia has no culture of dialogue and few people like to share these experiences. Ours is a culture of directives from the parents to the child and from the government to its citizens.

Writing the book pushed me to explore the larger geopolitical context to my personal story. It is also my way of reaching out to other Cambodians because we all exist in this fellowship of suffering. Through this book I’m trying to say to them that we should not let suffering overpower us. Suffering is our past but we should work to overcome it and shape into something more beautiful.

IPS: Can you share what you felt when you came face to face with the man you hold responsible for the deaths of your parents? The episode when you meet him during your trip to Pailin- the mountainous stronghold of the former regime – is among the most powerful in your book. TS: Seeing Khieu Samphan in person, for the first time, was surreal; I have seen him many times before in photos and film clips, so when I saw him in person at his house in Pailin, before his arrest, it was as if I have always known him. I couldn’t nicely fit the image before me, which was very grandfatherly, with the image I had held in my mind which was that of a monster. I was initially startled when I first saw him, with mixed emotions of overwhelming sadness, grief and a giddy sensation of not being.

IPS: Some have criticised the trial of Khmer Rouge leaders as flawed. What do you think? Is the ongoing court of justice significant? TS: The trial is important on several levels. It helps shed light on a very dark period of the Cambodian history. As a court of law, it also helps chip away at impunity which is prevalent in current Cambodian society. It is important and relevant for every one because it is a very powerful, visible symbol of justice. It allows for justice to be seen and done.

We know that trauma, like violence, is passed on. As violence begets violence, so trauma is inherited by the second generation. This is why the Khmer Rouge trial can help elucidate the emotional and psychological aspects of our national trauma for every Cambodian, including those who were born after and who were overseas.

IPS: You are a civil party to the trial. Are you seeking justice for personal reasons? TS: On a personal level, my involvement as a civil party in the trial means that I have an opportunity to honour the memories of my dead parents. On a public level, it means that I can help shape this process. I’m a victim but I’m also a lawyer. I know Cambodian people and I can help expand their pursuit for justice.

Our current government often says what is important now is that we have peace. But what we have is the absence of war. We have no presence of justice. All Cambodians seek peace and this trial would allow us to seek justice. With my team at the Cambodia Centre for Social Development we are trying to start a civil party of orphans, to engage a group of individuals who lost their parents to the Khmer Rouge regime.

IPS: Is the Khmer Rouge trial a trial of individuals or a trial of an ideology, a trial of a system? TS: The Extraordinary Chambers in the Courts of Cambodia (ECCC), the formal name of the Khmer Rouge trial, is both a court of law and a court of public opinion. As a ‘court of law,’ it is limited to trying individuals, not an ideology or a political system. However, as a ‘court of public opinion,’ it is trying all these three – the individuals, the ideology and the political system.

The ECCC is only mandated to try the upper echelon of the Khmer Rouge regime. That is, the individuals are limited to the ‘senior Khmer Rouge leaders’ and those Khmer Rouge in rank and file who were ‘most responsible’.

The ideology in the dock in the court of public opinion is class warfare,the elevating of the peasant class to a status of reverence, the cold war and imperialism. The system in the dock is communism generally, and as practiced by the Khmer Rouge.

IPS: How is the trial relevant to people who were born after the Khmer Rouge’s fall from power (people from outside Cambodia)? TS: It is relevant for everyone as we are trying crimes against humanity, not only against Cambodians. The crimes reached such scope and level of atrocious that they are an assault against mankind as a whole, and not only an individual or a people. They undermine human dignity.

Excerpt:

United States Secretary of State Hillary Clinton’s upcoming maiden trip to China this week has raised both expectations and apprehensions in Beijing.

Clinton’s pledge to broaden the U.S. administration’s once economy-fixated approach to China to include delicate issues like human rights and climate change has rekindled hopes among activists and environmentalists, but caused misgivings among political observers.

In her first major speech as secretary of state, Clinton devoted much breath to the significance of stable U.S.-China relations.

“Some believe that China on the rise is by definition an adversary,” she said at the Asia Society in New York on the eve of her four-nation regional tour. “To the contrary, we believe the U.S. and China benefit from, and contribute to, each other’s successes.”

Her approach to dealing with China by combining key economic concerns with security, environmental and rights issues was emphasised as soon as she landed in Tokyo, Monday, on the first leg of her Asia tour.

“We have a very broad agenda to deal with when it comes to China,” Clinton said. “This trip will be intended to find a path forward.”

Proof of it came almost immediately with the announcement of the resumption of military dialogue between China and the U.S. The English-language ‘China Daily’ newspaper, citing a spokesman for China’s ministry of national defence, said military talks will resume in Beijing later this month, on the heels of Clinton’s visit here Feb. 20-22.

China suspended these contacts last fall after the administration of former president George Bush decided to sell 6.5 billion US dollars worth of arms to Taiwan, which Beijing regards as a renegade province.

“The Obama administration has set a positive tone to work with the mainland,” the paper quoted rear admiral Yang Yi, top military expert with the University of National Defence, as saying.

In other areas though, tensions are likely to surface.

While the Bush administration was muted in its public criticism of human rights abuses in China, Clinton raised hackles promising to speak about human rights issues when she takes part in a town hall meeting in Beijing. In her speech in New York she did not baulk at pointing out that Tibetans had a right to practice their religion without persecution.

The prospect of Chinese leaders being lectured on their country’s human rights record publicly evokes uncomfortable memories of Clinton’s visit to China in 1995 when she attended the fourth World Conference on Women.

In her role as the U.S. first lady, Clinton had caused a stir by delivering a powerful speech on the universal value of human rights and criticised China for refusing to face up to human abuses on its own soil.

“Freedom means the right of people to assemble, organise, and debate openly,” Clinton admonished her Chinese hosts in 1995. “It means respecting the views of those who may disagree with the views of their governments. It means not taking citizens away from their loved ones and jailing them, mistreating them, or denying them their freedom or dignity because of peaceful expression of their ideas and opinions.”

Beijing hosts blacked out her speech out on official radio and television then but a repeat of her criticism now – when virtually everything is available on the Internet – can have great public resonance.

Some Chinese experts believe Clinton’s pledge to make U.S.-China dialogue all-round to include a wide range of rights issues is premature.

“Neither China, nor the U.S. for that matter, is ready to begin such broad talks,” says Sun Zhe, an expert on U.S.-China relations at Tsinghua University in Beijing. “There is a lot of rhetoric on the part of the Democratic Party about human rights, women rights and labour rights but not a single real confrontation.”

“China is not opposed to a comprehensive dialogue,” says Chu Shulong, a professor of political science at the same university, pointing that the two countries have a specific bilateral framework for dialogue on human rights and have been discussing the issue for years.

“But throwing human rights and climate change in the same pot as economy and security would not help achieve much because the two sides have serious disagreements,” Chu said.

But many observers have expressed excitement at the new climate in bilateral ties.

Zhang Guoqing, a U.S. expert at the Chinese Academy of Social Sciences, believes that Obama administration’s determination to part with Bush’s unilateralism and demand more strategic responsibilities from its allies and partners represent a chance for China.

“As much as this is a listening trip aimed at understanding opinions in Asia, it would be also an opportunity for the U.S. to demand share more,” he wrote in the ‘Beijing Youth Daily.’

Green groups have been particularly encouraged by talk that climate change will figure high on Clinton’s agenda in Beijing. During her visit, Clinton is scheduled to visit an energy-efficient power plant near the capital built by General Electric in cooperation with a Chinese partner.

President Barack Obama has outlined the development of non-polluting energy technologies as one of the main tools for reviving U.S. economy. China, for its part, hopes to receive cash and technology from developing countries in return for committing to any limit on its emissions.

“Hillary Clinton’s trip to China is a milestone in launching U.S.-China dialogue on climate change,” says Li Yan, Green Peace China climate and energy campaigner. “The whole world is waiting for China and the U.S. to show leadership in mapping the road beyond the Kyoto treaty.”

Some 190 countries are racing against time to craft out an agreement to replace the Kyoto Protocol in time for a U.N. conference on climate change scheduled to take place in Copenhagen, Denmark, in December.

By Antoaneta Bezlova
BEIJING, Jan 16 2009 (IPS)

As China rushes to implement its four trillion yuan (585 billion US dollars) economic stimulus package, success is seen dependent on the ability of government officials to come up with free land for the hundreds of new infrastructure projects like airports and housing that Beijing hopes would lift growth and keep recession at bay.

But land is a precious commodity in China.

When a leading mainland economist suggested recently that Beijing’s steadfast insistence on keeping a minimum of 120 million hectares of arable land was “a hurdle for China’s further industrialisation and urbanisation” and should be discarded, it created nothing less than a public furore.

Mao Yushi, founder of the independent Unirule Institute of Economics, has overnight become “a public enemy,” said the ‘China Times’ newspaper. His suggestion that China stop pursuing a policy of food self-sufficiency and rely instead on the world grain market for supplies have quickly transformed him into a target for “vehement criticism”.

“Whoever went through the famine during the late 1950s and early 1960s in China knows how important food is,” a netizen going by the name of “sgy123” said. “It is quite dangerous for 1.3 billion people to rely on imported grain.”

Another Internet critic, “Beibeibao,” said: “We would rather have a lower growth speed than make concession on independent grain production policy. If a government fails to shoulder the responsibility in this regard it would let Chinese people down. I fully support the protection of farmland bottom line.”

The vilification of Mao Yushi comes at a painful time for the world’s most populous nation. This year marks the 50th anniversary of the famine that left tens of millions of people dead during the Great Leap Forward – Mao Zedong’s utopian attempt to make communist China leapfrog the industrialised nations of the West.

The anniversary is likely to pass unmarked but the leadership has pulled out all stops to guarantee a minimum of 120 million ha of arable land, which it says is needed to ensure the food security for its 1.3 billion people. The minimum supply of land is essential, they say, if the country wants to secure 95 percent food-sufficiency.

To Beijing’s dismay, the imperative to preserve land is now in sharp conflict with the leadership’s number one priority for 2009 – to preserve growth. The ministry of land and resources estimates that about 80 percent of the stimulus package announced by Beijing in November would require new slots of land.

Fighting to save rapidly shrinking arable land has been one of the government’s main concerns in recent years as urban development and environmental degradation have encroached on China’s scarce supplies. The country’s arable land shrank by more than 40,000 ha in 2007 to 121 million ha, which is only slightly above the mandated bottom line.

But if Chinese leaders dread instability caused by food shortages, they fear no less an economic gloom that could see thousands of unemployed people protesting on the streets.

The global economic slowdown has become a serious test for Beijing in succeeding to keep the country’s economy growing. The ruling Communist Party has linked its legitimacy to providing continuous economic fortunes for its people and a hard landing for the Chinese economy, which has been expanding at double-digit rates since 2003, could imperil its grip on power over the country.

The conflict of interests was apparent at a news briefing organised by the State Council, China’s Cabinet, in December. Lu Xinshe, vice-minister of the ministry of land and resources, spoke about the growing pressure on arable land.

“It is a huge amount to be invested in a very short period of time,” Lu said of the fiscal stimulus package that is to be implemented through to the end of 2010. “With so many projects to be built, it will be a challenge to keep the bottom line of arable land.”

To some economists though, the minimum required arable land serves not the country’s food security issue but the government’s need to keep land grabbing in check. Land grab by local officials, intent on real estate development, has been one of the main sources for civil unrest in a country where 750 million people are still tied to the land.

“The arable land bottom line is meant for social security and not for food security,” argues Zhao Nong, who leads a research team at Unirule.

With the help of funding from the U.S. Ford Foundation, Zhao’s team worked on the controversial report about the connection between China’s grain sufficiency and its arable land, which landed Unirule’s board chairman Mao Yushi into trouble.

The team has been accused of selling out the country’s food security policy. Using U.S. money to produce a report, which promotes China’s purchase of U.S. grain, is tantamount to a betrayal, some have said.

The report discredits claims that 120 million ha of arable land is a pre-requisite for China in keeping hunger at bay. It argues that instead of hording land the country should rely on imports to make up for any shortfalls of grain. China consumes 500 million tonnes of grains every year and so far its annual output has hovered around this figure.

After its publication in late December, the report ignited a wide polemic about China’s historical memory and its fears of famine.

“Chinese people’s deep ingrained fears of hunger are now used as a horror tool by those who oppose the progress of land reform in the country,” says Su Qi, a columnist for the China Investor Journal.

Excerpt:

By Antoaneta Bezlova
BEIJING, Jan 12 2009 (IPS)

China’s pro-active stance in finding a settlement to the latest crisis in the Middle East – a trouble spot which does not normally figure on Beijing’s list of top foreign policy priorities – suggests heightened attention to energy security for the country’s power-hungry economy.

Joining the calls for an immediate ceasefire in the Gaza Strip, China announced it will be sending its Middle East special envoy to Egypt, Israel and Palestine to promote conflict resolution.

Beijing has also pledged one million US dollars of emergency humanitarian aid to the Palestinian National Authority and promised it will send more in the future.

“We grieve over the deteriorating humanitarian crisis in the Gaza Strip,” Foreign Ministry spokesman Qin Gan said at a regular press briefing last week. “We appeal to relevant parties to immediately stop military actions.”

Chinese leaders have expressed concern about the worsening armed conflict in the region.

Chinese President Hu Jintao held a telephone conversation with U.S. President George W. Bush after the conflict broke out and foreign minister Yang Jiechi has also spoken, via telephone, with U.S. Secretary of State Condoleezza Rice.

The conflict overshadowed China’s celebrations of the 30th anniversary of establishing diplomatic relations with the United States. Because of the Israeli-Hamas violence, Rice cancelled her trip to Beijing to attend the celebrations last week, bringing to the fore the importance Washington attaches to the situation in the Middle East.

“China is an emerging economic power and has to push for increasing its influence in the Middle East,” says independent energy analyst Liu Tao. “Participating along with other world powers in the resolution of the current conflict in the region can help China better ensure its energy security.”

Although a relatively new player in the Middle East, in recent years China has invested diplomatic efforts into cultivating relations with countries in the region. While seeking to carve out a space for itself in a region traditionally dominated by U.S. and British influence, Beijing has concentrated on upgrading economic ties.

Arab countries are currently China’s eight largest trading partner. In the Middle East, and in the Persian Gulf in particular, China is no longer viewed just as a source of low-priced consumer goods but mainly as a major market for oil.

Securing access to oil is what has underpinned Beijing’s charm offensive in the region since the country became a net oil importer in 1993. Today, more than 50 percent of China’s oil imports come from the Middle East.

The country’s energy officials have adopted a strategy of energy diversification, working to secure concessions and investments in oil and gas fields in other resource-rich countries like Venezuela and Nigeria.

Yet the bulk of China’s oil imports remain dependent on the Middle East which holds two-thirds of the wrold’s proven oil reserves.

The International Energy Agency predicts that Chinese oil imports from the Middle East will rise to at least 70 percent by 2015, underscoring that the prospects of maintaining high growth for Chinese economy are inextricably tied to the fortunes of the Middle East.

While the current crisis does not involve major oil-producing countries in the region, Chinese energy analysts have pointed at its impact on oil prices. Worries that the armed conflict could engulf the oil-rich Middle East, had helped push oil prices to 48 US dollars per barrel last week.

“The conflict is a godsend for those hoping that oil prices will bounce back to some more acceptable level,” says Dong Xiucheng, expert at China University of Petroleum in Beijing.

For China though, the conflict may bring disruption to recently announced plans to stockpile oil. Amid low international oil prices Beijing has been seeking to fill up its strategic oil reserves, quickening the pace of its imports.

While China does not disclose its oil inventories on a regular basis, it has been upgrading its existing storage facilities and building new ones.

The country’s plans to create strategic oil reserves came to a halt after oil prices hit 70 dollars a barrel in August 2007. Analysts believe Beijing resumed filling up the reserves in the last few months, taking advantage of falling global demand for energy.

In early January, Zhang Guobao, head of the National Energy Administration, was quoted by the People’s Daily newspaper as saying that China will “encourage companies to utilise idle storage capacity to increase oil inventories”.

That followed news that the U.S. was seeking to buy as much as 20 million barrels of oil for its emergency stockpile while the low prices held.

Some Chinese newspapers have speculated that the conflict and its “price-inflating” effects were timed as a “parting gift” by the “Bush dynasty” to the U.S. oil majors. “The traditional mode of crisis the region has slipped into cannot disguise the war over petrol that is going on,” said a commentary in the China Times.

Excerpt:

Twenty years after the Chinese communist party deployed tanks to crush protests by disgruntled students on Tiananmen square, the country is facing the same volatile mix of rising unemployment and economic gloom that sparked the 1989 mass pro-democracy marches.

Now, as then, unsettling discontent is simmering among university graduates pouring out of academia and unable to find jobs.

Fearful of pockets of social discontent growing in the cities, Chinese leaders are now offering students their tuition fees back if they accept jobs in the country’s remote and underdeveloped areas.

“Faced with the spreading international financial crisis, our country’s employment situation is extremely grim,” Premier Wen Jiabao told the State Council, or cabinet, in an emergency meeting convened to discuss the job market this week.

“We must make the employment of higher education graduates a priority,” he was quoted as saying on the government’s official website (www.gov.cn).

Striving to make China a more innovative country the government has, in recent years, promoted an expansion of higher education and attracted more students. Some 6.1 million university graduates are going to enter the labour market in 2009 – about a half million more than last year – but their job prospects are looking increasingly dim.

More than 30 percent of the 5.6 million university graduates last year had failed to find a job as of August 2008, said the latest “Blue Book of Chinese Society”, an annual publication from the Chinese Academy of Social Sciences (CASS) that gauges the public mood.

The academy researchers found that the unemployment rate in urban areas was 9.4 percent. China does not publish reliable data on unemployment and few economists believe the official jobless rate of four percent takes into account factors such as mobile migrant labour and the urban poor.

Chinese leaders now face potential discontent not only among university graduates who fail to find jobs but also among parents who have invested their life-savings into educating their children.

“We never thought that it was a question of finding a job,” shares travel agent Wang Juanyi, whose daughter will start looking for a job this summer. “We were always made to believe that if we could afford all the extra lessons for our child, she would be able to get into a top university and this would land her a good job with a company. But now with companies throwing people out of their jobs we are not so sure.”

Some graduates have flocked to richer cities like Guangzhou in southern China, applying for jobs as nannies and domestic helpers, the state media reported. There have been 500 or 600 people applying every month, with the majority of them university students, the Guangzhou Daily, a provincial newspaper said earlier.

To counter the backlash from angry parents and students, the government announced this week that college graduates who take up jobs in poorer central and western regions of the country will be entitled to a full refund of their tuition fees.

“The refund offer shows the government’s determination to stabilise job market,” Chen Guangjin, a labour expert with CASS was quoted by the China Daily.

One of China’s more outspoken periodicals has also warned that the country may face social unrest in 2009 as unemployment rises because of the global financial crisis. The Outlook magazine, published by the official Xinhua News agency, said slowing economic growth may provoke anger in particular among migrant workers and university graduates.

The global financial crisis has caused the closure of 670,000 small and medium-size enterprises in China, many of them labour-intensive firms based in the manufacturing hubs of the coastal regions. The Ministry of Human Resources and Social Security estimated that more than 10 million migrant workers had lost their jobs, according to the magazine.

“We’re entering the peak of mass incidents,” Huang Huo, Xinhua’s bureau chief in the southwestern metropolis of Chongqing told the magazine. “In 2009, Chinese society may face more conflicts and clashes that will test even more the governing capabilities of all levels of the Party and the government”.

The 1989 massacre of unarmed students and civilians in and around the capital’s landmark square remains a blotch on the communist leadership’s image that no amount of public relations works has been able to repair.

The demonstrations in the spring of 1989 started as protests against the economic downturn and the inflation but snowballed to demands for democracy and political change. And although the drama was played out in Beijing, millions more in cities across the country mounted the largest political protests to grip China.

Now, as it did in the aftermath of the crackdown, the ruling party is attempting to rescue the economy by pumping vast amounts of money into infrastructure projects like roads, railways, airports and low-rent housing that have the potential to lift growth. In November Beijing announced a stimulus package of 4 trillion yuan (585 billion US dollars) to stave off the effects of the global economic decline.

But the World Bank says Beijing’s planned fiscal and monetary measures will be insufficient to restart growth unless accompanied by broader social welfare spending, which China neglected during its last round of infrastructure splurging.

The Chinese economy has expanded at double-digit rates since 2003, peaking at 11.9 percent in 2007. But this year the economy grew nine percent in the three months from July to September, threatening the expansion to which the communist party has linked the credibility of its one-party rule.

Conventional wisdom holds that China must maintain at least 8 percent of GDP growth to keep the unemployment rate manageable and to prevent social unrest. But predictions for 2009 are not rosy.

Goldman Sachs forecasts China’s growth will slow to six percent this year, while Moody’s Investors Service warns it could fall as low as five percent.

Chinese and United States leaders have hailed the 30 years of diplomatic relations between the two countries as one of the most defining bilateral ties of the 20th century, but Beijing and Washington are celebrating the anniversary in subdued mood.

U.S. secretary of state Condoleezza Rice has cancelled her planned trip to Beijing to attend the celebrations marking the anniversary in order to deal with the worsening crisis in the Middle East.

John Negroponte, Rice’s deputy, is arriving in her place to represent the U.S. at the event in Beijing this week.

The crisis in Gaza though is just a shadow over the festivities, compared to the serious soul-searching the two sides have been engaging in on the eve of their bilateral ties anniversary.

Given the backdrop of the biggest economic crisis the two sides have experienced since reestablishing relations in 1979, the anniversary has been a time of reckoning for both sides.

“In the short span of 30 years, with the joint efforts of several generations of Chinese leaders, seven U.S. presidents and people in both countries, the ship of China-U.S. relations has forged ahead, come rain or shine,” Dai Bingguo, a Chinese State Councillor, said in a speech released by the state news agency Xinhua this week.

“It has brought tremendous benefits to our two peoples and contributed greatly to world peace and development,” Dai Bingguo said in his speech.

The anniversary celebrates the U.S. decision to switch diplomatic recognition from self-ruled democratic Taiwan to communist mainland China on Jan. 1, 1979. The diplomatic hop was made possible by a groundbreaking visit to Beijing by former U.S. president Richard Nixon in 1972 and a reciprocal visit by Deng Xiaoping to the U.S.

The normalisation of relations coincided with China’s decision to embark on free-market reforms. The Communist Party had decided in December 1978 to endorse small-scale private farming, the first step towards abandoning Mao’s vision of communal agriculture and embracing free market.

No other diplomatic relationship has proved more conducive to China’s emergence as an economic powerhouse than ties with Washington. Today, the two countries are entwined economically and politically to an extent unimaginable when ties were normalised in 1979.

But it is this tight embrace that is now proving the biggest headache for the two nations as they struggle with the economic crisis.

In the earlier stages of China’s economic reform and opening, Beijing was dependent on the U.S. for valuable financial, technological and managerial knowhow. But as the country has developed, domestic capital has displaced foreign funds as the main source for investment.

What is more, armed with the foreign currency earned mainly from low-cost manufacturing exports, China has emerged as the largest creditor of the U.S.

Experts estimate that over the last 10 years, Beijing has invested around one trillion US dollars in dollar-denominated assets. If for whatever reason China decides to sell a portion of these holdings, it would trigger a collapse in the value of the US dollar.

U.S. dependence on China’s lending is regarded by some in America as potentially risky and there is fear that Beijing might decide to use its holdings of U.S. government debt as a bargaining chip in bilateral relations.

But even if not used as an effective political tool, China’s purchases of U.S. debt are a “demonstration of China’s financial leverage,” argue others.

“The U.S. runs the risk that it could need China to add to its foreign exchange reserves more than China actually needs more reserves – an asymmetry that potentially gives China the ability to influence U.S. policy,” Brad Setser, fellow at the U.S. Council on Foreign Relations, wrote in the magazine ‘China Security.’

Already, some Chinese officials have expressed frustration with U.S. economic and financial policies and complained about China’s potential exposure to the weakness of the dollar. Chinese scholars have been even blunter.

Writing in the same magazine, Zha Xiaogang, a researcher at the department of World Economic Studies at the Shanghai Institute for International Studies, warned that China is running out of patience with the U.S.’s lack of “disciplined financial and monetary policy.”

“Washington should no longer expect China to stand at the receiving end, buying treasury bonds despite great fluctuations in the value of the dollar,” he said.

“As America’s largest creditor, China will expect the U.S. to exhaust every means to protect the safety of its investments,” Zha Xiaogang wrote. ”Otherwise, the Chinese public will voice their objection loudly and exert great pressure on Beijing to reverse the policy.”

But, as they gather to celebrate the anniversary, Chinese officials are also fully aware that the two economies are so interlinked that the U.S. needs a helping hand from Chinese capital as much as China needs the U.S. market.

With Americans consuming less, the knock-off on the Chinese economy with its export-driven growth model has become obvious in recent months. About one-third of Chinese exports, including re-exports from Hong Kong, are destined for the U.S. market.

With the collapse of trade, factory closures and layoffs have been spreading rapidly in the country’s export-manufacturing hubs.

Some of the workers have rioted to protests closures and claim unpaid wages. Chinese leaders are terrified that the economic crisis might herald a wave of social unrest for the country, endangering their own grip on power.

Having allowed the yuan to rise a little after 2005, Chinese leaders are now under intense domestic pressure to reverse course and depreciate it. As bankruptcies have multiplied, unemployment has risen rapidly.

Some economists argue that the appreciation of the yuan, urged by the U.S. and other western trading partners, has hurt China’s exports more than the slump in demand caused by the economic recession.

“Since 2005 the value of the yuan has risen nearly 30 percent against the US dollar,” says Zeng Xiangquan, an expert on labour issues at China’s Renmin University. “We would have had to deal with its negative impact on our labour situation even if there was no global recession.”

A persistent drought threatens the harvest of grains in China, driving up food prices.

Harvested rice paddies in Yangshuo, southern China. - Photo Stock

Efforts to combat price hikes though by increasing grain supply are hampered by climate change, which has posed a severe threat to this year’s harvest.

“We’re facing a grave situation,” the country’s top planner, Ma Kai, said of the annual harvest last week, warning that global warming is taking its toll on China’s already shrinking farming land and its sacrosanct policy of food security.

More than 11 million hectares of arable land have been hit by drought this year, 2.14 million more than the average for the past few years, Ma Kai said while making a report to a working meeting of the National People’s Congress, China’s Parliament.

China, which has a fifth of the world’s population — 1.3 billion people using seven percent of the world’s farmland –, is used to scarcity of resources and has managed to have a succession of bumper harvests in recent years.

Yet government officials now fear that the combined effects of climate change and inflation pressures could destabilize public mood ahead of the 17th Communist Party Congress — a five-yearly meeting, designed to chart the party’s policy and seal the legacy of its current leaders.

Drought is already affecting 22 of China’s 31 provinces. Meteorological experts say that global warming would exacerbate things as a one-degree rise in temperature could aggravate ground water evaporation by seven percent.

Zheng Guogan, head of the State Meteorological Administration forecasts global warming will cut China’s annual grain harvest by up to 10 percent. That would mean about 50 million tons less grain in the current tight supply situation and a potential for further inflation.

“Given the tightened food supply in the international market, a decline in domestic grain production could lead to more price hikes,” Song Tingmin, vice-president of the China National Association of Grain told the China Daily.

A surge in food prices saw China’s consumer price index (CPI) rise to a 10-year high of 5.6 percent in July, far above the government’s upper target of 3 percent for the whole year. Economists say the August inflation rose even higher on the back of soaring pork costs.

The social dimensions of such leaps in inflation are not lost on a government, which remembers that 1989 pro-democracy movement that saw thousands of students, workers and intellectuals out in street protests was triggered by public anger over inflation.

In the past China would have tackled inflation woes by increasing imports of commodities but this strategy is seen as no longer viable because of rising prices of grain abroad. Citing the need to “stabilize inflation expectations”, Beijing reacted by ordering the central bank to raise interest rates for the fourth time this year.

In recent months Chinese leaders have also made publicized efforts to raise farm output and curb price hikes. Premier Wen Jiabao who has warned that continuous price rises pose a threat to social stability made a high-profile tour of pig farms and farmer markets earlier this year, attempting to reassure the public that Beijing was acting to solve the inflation problem.

To counter the threat of diminished farm output, the government has offered subsidies to pig breeders and started weighing options of growing more drought-resistant crops like potatoes. In August Beijing ordered local governments to check food producers, wholesalers and retailers for price fixing and gouging.

In the latest sign of unease over the price hikes, this week the Ministry of Education ordered universities to provide subsidies for hard-up students and ensure the stability of food prices in student canteens.

“We hope that university students will have correct understanding of fluctuations in food prices,” ministry spokesman Wang Xuming was quoted as saying Tuesday, sounding yet another poignant reminder that 1989 protests started in university campuses.

China observers speculate that runaway inflation has been the cause for last week’s removal of China’s finance minister, Jin Renqing. Ostensibly, Jin was just one of several government officials reshuffled in the run up to the party congress on Oct. 15 and reports of his sexual misconduct and various mistresses were somehow accidentally leaked to the press.

But, says one Beijing-based foreign diplomat, “I do believe his (Jin’s) alleged dalliances have to do more with inflation than with sex”.

Reigning in inflation is perceived as important by the current Chinese leadership of President Hu Jintao and premier Wen Jiabao. Both have made equalizing of robust but uneven economic growth and helping the poor and downtrodden their political priorities.

When the Communist party conclave convenes on Oct. 15, Hu Jintao, who is also party chief, would seek to cement his political legacy of promoting a “harmonious society” and “fair and just polices”, by finally naming a successor designate.

The Asian giant accounts for 60 percent of the global total of carbon credits. More than 100 “clean development” projects are under way in China

A coal-fired power plant in China. - Photo Stock

Initially skeptical of the carbon trading market, worrying that it allow richer nations to pay their way out of obligations to reduce emissions under the 1997 Kyoto Protocol on climate change, China has now come to embrace the system as an opportunity to attract foreign investment in promoting energy efficiency and renewable energy projects.

China currently accounts for 60 percent of carbon credits trading under the Clean Development Mechanism (CDM) developed under the Kyoto Protocol. Its dominant position in the thriving market represents a big change from a few years back, when it had just five percent of the contracted volume.

The CDM allows polluters in one country to earn credits by reducing greenhouse gas emissions in another. Since global warming is a worldwide phenomenon, the mechanism reasons, it does not matter where the reductions actually occur. And because of the cost of implementing reductions in developing countries is often cheaper than in industrialised economies, polluters in the industrialized countries benefit from credits through projects in countries such as China.

At the first Carbon Expo Asia — a conference on emissions trading, held in Beijing — officials hailed the CDM as a win-win solution between developed and developing countries that could provide environmental investment for free.

“Developed countries get opportunities to emit greenhouses gases at a relatively low economic cost and achieve their emission reduction targets, while developing countries get benefits such as funding and technology transfer, which will boost their efforts to pursue sustainable development,” said Jiang Weixin, a senior official of the National Development and Reform Commission.

Weixin spoke at the opening of the Expo, an event modeled after an emissions-trading fair in Cologne, Germany. The choice of China as a host underscored the country's growing importance in the global emissions trade. The vast majority of CDM investment has been heading to China, with India and Brazil also receiving big portions.

In the past, China has called for industrialized countries to take more responsibility for reducing emissions. As a developing nation, China is exempt from curbing its output of greenhouse gases under the Kyoto Protocol. But as the benefits of international mechanisms like CDM have become apparent, Beijing has welcomed the investment and help it provides by streamlining its approval process and cutting bureaucratic delays.

Since the United States — the world's biggest emitter of greenhouse gases — has refused to accede to the terms of the Kyoto Protocol, most of the potential buyers of carbon credits are from Europe and Japan. The exemption also of rapidly developing economies such as China and India from the reduction targets has prompted critics to say that the current regime leaves the world's biggest polluters outside the strict controls.

Despite the shortcomings of the climate change treaty, its core mechanism –¬ carbon trading — has proved to be resilient, and of particular significance to China.

Beijing has approved 125 projects so far under the CDM, including wind farms and hydropower generation, as well as chemical-pollutants reduction projects.

These are expected to cut 630 million tons of carbon dioxide, ¬the main gas contributing to global warming, by 2012, when the first phase of the Protocol expires.

By then, some predict that China could be the main supplier of emission trading units in the CDM market.

“It is possible because China is the biggest developing country,” says Zhang Jianyu, from the Beijing office of Environmental Defense, a U.S.-based group promoting emissions credits trading.

Three decades of breakneck industrial development have spurred China's economic growth, but also spewed emissions that have polluted the global environment. China now accounts for 14 percent of global carbon dioxide emissions. It is also the biggest emitter of sulfur dioxide, which causes acid rain.

Emissions from China and other rapidly growing economies in Asia are also increasing faster than in other countries. According to a World Bank report issued in May, China increased its greenhouse gas emissions by 33 percent between 1992 and 2002, while India's emissions grew 57 percent over the same period.

Despite the newly found enthusiasm for CDM among Chinese officials, its future in China remains questionable, not the least because of Beijing's own development plans.

Hit by acute power shortages in the past several years, the country has embarked on a frenzied campaign to build more power plants.

Japan's Institute for Energy Economics predicts that by 2007, China will have built an additional 200,000 megawatts of new power-generating capacity, about 80 percent of which will be coal-fired.

This greater capacity is expected to contribute some 1.17 billion tons of new carbon dioxide emissions by 2010. This whopping amount would eat up a good portion of the targeted overall emission reductions under the Kyoto Protocol of 5.5 billion tons of carbon dioxide over the same period.

China already relies on coal for about 70 percent of its energy supply. While aware of its high-polluting effects, Beijing has been slow to diversify its energy sources or to increase energy efficiency. Rocketing prices of oil and natural gas of late have made this even more difficult.

A new report on confronting climate change ranked China near the bottom of its index of 56 countries that were part of the 1992 United Nations Convention on Climate Change. Released by the Climate Action Network – Europe, the report ranked the United States at 53, with only China, Malaysia and Saudi Arabia below it.

But Chinese officials defend Beijing's record on fighting climate change. They point to Beijing's commitment to reduce energy consumption by 20 percent and pollutants by 10 percent in the next five years.