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China's Olympic Nightmare

Speakers: Elizabeth C. Economy, C.V. Starr Senior Fellow and Director for Asia Studies, and Adam Segal, Maurice R. Greenberg Senior Fellow for China Studies
Presider: Gideon Rose, Editor, Foreign Affairs, and Peter G. Peterson Chair, Foreign Affairs
August 6, 2008
Council on Foreign Relations

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OPERATOR:  Excuse me, everyone.  We now have your speakers in conference.  Please be aware that each of your lines is in a listen-only mode.  At the conclusion of today's presentation, we will open the floor for questions.

At that time, instructions will be given, as to procedure to follow if you would like to ask a question.  I would now like to turn the conference over to Gideon Rose.

Mr. Rose, you may begin.

GIDEON ROSE:  Welcome, everybody.  Gideon Rose here, the managing editor of Foreign Affairs, with the distinct pleasure of bringing you two superb China experts, for discussion of China and the games.

Elizabeth Economy and Adam Segal, who are both fellows at the Council on Foreign Relations, have written the article "China's Olympic Nightmare: What the Games Mean for Beijing's Future" in the July/August issue of Foreign Affairs.  And they're here to talk with us today, about the games and China's future, and to answer your questions about all aspects of everything, except whether Michael Phelps will actually win a medal.

Liz or Adam, why don't you start by describing briefly, for those few recalcitrant souls who might not have read the piece, briefly recapping your argument and then updating it to what has happened to change anything you wrote, or update it since the last couple months.

ELIZABETH ECONOMY:  Okay.  So this is Liz and maybe I'll take a crack at that.

I think the major point of our article was fairly straightforward.  And that was that what had been sort of supposed to be Beijing's grand coming-out party, the Olympics, has really turned into a much more challenging event for Beijing than I think it had -- than we think it had anticipated.

In large part, that's because there are some things that Beijing does very well -- namely sort of grand-scale construction, you know, these large infrastructure projects; mobilizing the people in campaigns, to try to clean up the city, learn English, etiquette campaigns, et cetera -- but that a lot of the softer infrastructure really required much more fundamental reform than what Beijing was prepared to do.

And so you see, when it comes to things like the environment or the Internet access or the broadening of human rights that China had promised back in 2001, when it won its bid, that these things haven't really come to pass, in the way that Beijing and the IOC, I think, really promised the international community they would.  And now Beijing has been sort of pushed up against the wall.  And it's the number of stopgap measures on all these fronts.

And I think, you know, that was really the major point of the article.  And in terms of what has changed since the article, you know, is there anything that, I think, would change in our argument?  I don't think so.

I think that we've seen, you know, right up until the day before the Olympics, that there's still concern about the air quality in Beijing; that Beijing has taken very repressive measures against dissidents and petitioners, you know, having police arrest them, send them back to their provinces, doing all these kinds of things.

And I guess with the Internet access, it looks like that was sufficiently going to be embarrassing enough for the government that they have unblocked a lot of the websites they had planned to block just up until last week.

Nonetheless, I think, it has not proved to be the kind of transformative event that many had thought it would be for China in terms of opening up into the world.  And I think it hasn't proved to be this, again, great coming-out party that Beijing really wanted it to be.  And I think the hope now moving forward is frankly that -- at least my hope is that really the focus is going to turn to the games themselves and to the athletes, because they're really the ones that are deserving of our attention.

ROSE:  Now, you -- talking about the athletes for a second.  You see these pictures in the paper about the U.S. athletes with masks on their faces.  You're, of course, an environmental expert, and your last brilliant piece for us was about China's environmental nightmare.  So why is it so difficult for China to ensure even a relatively simple, straightforward thing such as clean air for the games?

ECONOMY:  Huh.  Well, you know, again, back in 2001 -- and let me say, I don't think I've ever gotten so many compliments out of you, so I appreciate all the compliments.  (Chuckles.)

But I think back in 2001, again, people thought that this was somehow going to be a springboard to effective environmental protection in China.  But the kinds of steps that we would have needed to see Beijing take would require far more than they were willing to take.  Because really, they require reform of the basic political economy.  Right, you need to have incentives on the economic side, you need to, you know, raise the prices of fines for for polluting enterprises.  You need to change the way that you price your natural resources.  You know, water's priced at 20 percent of replacement costs.  You need to, you know, raise that up to 80 to 100 percent of replacement costs to encourage people to conserve.  You know, and on the political side, you need transparency in the system.  You need official accountability.  You need rule of law.

These are the fundamentals of environmental protection in any society, and they speak to fundamental reform within China.  And it's this kind of reform that Beijing, especially, I think, with its administration of Hu Jintao and Wen Jiabao, that they have not been interested in undertaking. We've seen very little movement on this front.

That's not to say there haven't been some important measures taken on the environmental front, but again, the kind of environmental reform that would have ensured a clean environment for the Olympics would have been a very difficult undertaking and would have required something far more than they were willing to do.

ROSE:  So because they couldn't take the big measures to really address the underlying problem, they've been forced to take the drastic short-term measures just to try and shut everything off and cap it in terms of the immediate environment of the games this week.

ECONOMY:  Exactly.  And I think one of the surprises, at least for me, was that last year, when they had the opportunity to undertake an environmental protection test, right, so they were going to see what was necessary to do to ensure clean air, they did a very sort of narrow test.  They just pulled a third of the cars off the road in Beijing, and they discovered that in fact that wasn't going to be enough.  But that left them sort of grasping at straws and trying to determine what would they need to do.

And so now you have this sort of progressive set of measures, increasingly stringent and tough.  You know, what to do 48 hours in advance.  If it looks like the pollution's going to be bad, you know, we're going to shut down an additional 220 factories and stop all construction in Beijing and Tianjin and Hubei, et cetera.  So, you know, again, they're just sort of left trying to figure out -- move very quickly to see what they can do.  And the truth is I don't think there's any guarantee at this point that the athletes are going to have good, clean air.

ROSE:  Let me direct this to both of you.  We -- there's an aspect almost -- when we hear about the Chinese state being this extraordinarily dominant, sometimes repressive, sometimes efficient and successful entity, but throughout your piece and some of the discussion we've just had, there seems to be almost a cluelessness that the Chinese have demonstrated in not anticipating what might be considered relatively obvious challenges.  Gee, don't you think there are going to be protests about Tibet when the Olympic torch marches?  Gee, isn't environmental air quality going to be a problem?

So why have they -- why is the Chinese state so successful in some things but unable to anticipate what would seem to be obvious challenges and plan ahead to deal with them?

ADAM SEGAL:  I'll just -- I'll start off with this, Liz.  I think -- they did anticipate, I think.  You know, clearly on the security front, when we look at the build-out on the surveillance and other types of intelligence -- they're clearly ready to kind of arrest dissidents.  And as Liz just discussed, they were thinking a lot about, you know, how do they make sure the air is clean.

I think the problem was that the instruments, the tools that they used were not the right ones.  And so they continually kind of went back to these top-down, let's get this done in a hurry, let's throw resources at the problem kind of thing and were not able to kind of develop out these more soft infrastructure ways of disarming or engaging their critics.

And I think -- you know, we're continually seeing that, you know, one day before, two days before the Olympics start, I mean, this rejection of the visa for Joey Cheek -- seems like the smart thing would have been -- was just to let him come, right, and not make it a huge issue.  But by denying the visa beforehand they focused press on him before he even arrives.  So it seems that the system itself is unable to make these kind of changes midstream and they continue doing what they've done before.

ROSE:  Okay, Adam, let me take you into your area, your comfort zone, technology and the economy.  You have reports -- there's a brilliant article from this morning's paper about how the Chinese taxis are now being outfitted with microphones to eavesdrop on conversations of passengers.  There's a whole array of a sort of surveillance state being erected in China, ostensibly under the guise of providing security during the games and security against terrorist attacks, but also many people feel with the dual-use purpose of enforcing the security apparatus of the Chinese state for repression.

How is technology playing into this?  How is it enabling the Chinese state to maintain control and how is it undermining that state's ability to maintain control?

SEGAL:  Well, I think -- you know, as you said, they're clearly building out the surveillance infrastructure.  And I think the presence in Beijing and in other cities -- Shenyang and Shanghai -- is going to be a major long-term impact of the Olympics, but it's not just simply because of the Olympics.  They were building it up before.

And you know, I think it's not a -- it's part of it.  It's part of their ability, I think, to control protests, especially in urban areas.  But it's not a major source, I think, of repression or of stability.  I think, you know, for the major source of stability, we can look at the Pew poll that came out this week, which is that, you know, 86 percent of the people polled think that China's headed in the right direction.  So for most urban-dwellers, especially those in Beijing, Shanghai or Shenyang, they still see China headed in the right direction and are going to not, I think, significantly challenge the regime right now directly.

On the opposite side, clearly with the Internet and controls there, you know, we constantly see a cat-and-mouse game here.  It hasn't led to the democratization or kind of wide-spread spread of information that, you know, people were predicting when President Clinton said that controlling the Internet was like, you know, nailing Jell-o to the wall.

But it clearly has changed the terms of reference for Chinese leadership and for the Chinese people.  We saw with the protests in Guangzhou about the death of the woman that these things cannot be covered up.  And they are then spread around the Internet and people discuss them.  So a great -- much more space to discuss these things.  But are they leading to kind of a direct challenge on the regime?  I don't think so.

ROSE:  Okay.  Liz and Adam, both of you, I want you to tackle the $64,000 questions in Chinese future development.  You have two schools of thought, you might say.  One is the idea that what you're seeing in China -- development of a robust, vibrant authoritarian capitalism -- they managed to find the key to economic development, buy off their people and be strong and oppressive at the same time.

And another school says, oh, that's ridiculous.  This is just going to be the typical story of modernization in which economic development leads to social development leads to political development.  It's just taking time.  It's already happened.  The state's already freer and that will just continue to go in the right direction over time if you will just give it a chance.

Which broad school do you guys buy into?  Or how do you see the future of Chinese economic and political development going in the years to come?

ECONOMY:  Well, let me take your question and pick up on something that Adam just said about the issue of protest and sort of the confidence and support of the Chinese people for the regime.  I think despite what the Pew poll says, there is clearly significant discontent within China.  The last number that we have for, you know, number of protests is 87,000 protests.  Most people think that that's well above 100,000 now.

ROSE:  In what time frame?

ECONOMY:  Back in 2005, 2006.  It's the last number.  And they've stopped publishing the number, but there's been a steady increase in the years preceding that.

But what I think is interesting over the past year that hasn't been noticed perhaps by many people is that there's been a shift, and the shift has been that the protest is no longer confined simply to the rural areas but, in fact, has moved into urban China.  And I think this speaks to the issue of why the Chinese government may be much more concerned about the surveillance capacity, et cetera, in the urban areas, so that we've had protests in Xiamen, in Chengdu, in Shanghai -- interestingly, on environmental issues -- that have been quite sizeable.  And well, Shanghai was not that sizeable, but nonetheless, they're a different kind of protest.

They're not responses to, for example, pollution that has happened, but they're responses to knowledge of something that's going to happen.  Right?  The people are articulating a desire to have input into the policy process.  They're saying, we don't want this highly polluting chemical factory to be sited here.  We don't trust the government when it says that this maglev -- high-speed maglev train is environmentally safe.

So this is a different kind of protest than we've seen before, and I think it's potentially very significant.  It speaks to the issue of whether or not China is somehow going to be different from the rest of the world in its development, in that kind of political modernization.

You know, in the past five to seven, 10 years, people have been talking about the Chinese middle class just seems to be -- (chuckles) -- sort of satisfied.  Right?  They're making money, and that's all the Chinese people care about.  And I simply -- I don't think that's true.  I think increasingly we're seeing, both on the environmental front, the homeowners' front -- and, I would guess, in other areas, public health, we will probably see as well -- protests that are very much reminiscent of those that take place in other countries.  And you do have intellectuals and dissidents that are speaking out for change, via the Internet, you know, via letters to the government, et cetera.

So I think that over time we are going to see the evolution -- a serious evolution, a significant evolution in China's political system, and my hope is that it will come via somebody within the central government, within the politburo, who will say, "We recognize the time has come," a reformer who will pick up on the signals from down below, so that you don't get a more violent kind of push for change.

So I think there's significant social unrest within the country.  I think Beijing is enormously concerned about this.  It comes up in virtually any speech that Hu Jintao gives, and I think it would be a mistake to underplay it.

ROSE:  Adam?

SEGAL:  Well, I don't completely disagree.  I wouldn't agree that urban protests are something new.  I mean, look in the late '90s; we had all of this urban protest that happened, especially in the rust belt, when you had all of these workers being laid off, and you had throughout that, the whole time period, kind of urban protests, especially that have been focused around laid-off workers.

I do agree with Liz that there is certainly something happening, but I'm not sure how much of it is still right now basically kind of quality of life issues, and yes, certainly some input.  I don't think it's tenable long-term that this -- that people then somehow drop out of wanting -- having to say it in their larger life.  So I think my long-term trajectory is similar to Liz's, which is that eventually as kind of demands on the middle class for taxation or other things go up, people begin pushing the government for more and more say.

But given any lack of organized opposition, given kind of the fear of what comes next -- and I think most urban dwellers are pretty worried about losing what they've gained -- that I think they've basically continued being pretty satisfied, or if not satisfied, at least supporting the current system; and that the hope is, then, as Liz said, something from the inside.  But I think the party's pretty worried about anything on the inside.  I think any sign of kind of a split at the top or factionalism worries them a great deal after what happened at Tiananmen.  So I think it kind of goes along a long time like this --

ROSE:  "A long time" meaning what?  Years?  Decades?  Generations?

SEGAL:  At least a decade or two of a kind of authoritarian state that is flexible and tries to become more responsive, but only at the margins.

ROSE:  Okay, there -- as always, there are so many things I could ask you guys, but we have to turn it over to our wonderful audience and let them in on the conversation as well.  So with that, let's throw it open for questions for Adam Segal and Liz Economy from our various reporters.  You'll now get instructions on how to do that.

OPERATOR:  At this time, we will open the floor for questions.  If you would like to ask a question, please press the star key, followed by the 1 key, on your touch-tone phone now.  Questions will be taken in the order in which they are received.  If at any time you would like to remove yourself from the question queue, please press star, 2.  Please limit your questions to one at a time.  Again, to ask a question, please press star, 1.

And our first question comes from Shin Choji (sp) from NHK.

QUESTIONER:  Good afternoon.  Thank you so much for your time.

With regards to the Olympics in China, like, this isn't the first time China has hosted a big event.  Like, last year, they had the Women's World Cup.  You know, they had a basketball event in 2003.  And they also had a big Asian Cup, you know, soccer tournament in 2004.

So I guess my question is, why has the Olympics been such a big issue?  And then for, you know, China, if they're interested in hosting the World Cup, you know, the men's soccer tournament, 2018, if it comes back to Asia, like, what do you think is the prospect for them, in international sports events?

SEGAL:  I would suggest that the Olympics are different -- many of the events you describe were fairly regional, has a regional impact -- and that the Olympics is clearly, truly global, and that the scale of everything involved -- the 40 billion, the redoing of Beijing, the extra subway lines, the redoing of the terminal -- the scale was much, much larger.

You know, I think, probably with the World Cup, the World Cup organization, FIFA, is going to be swayed by many of the arguments that the IOC was swayed by which is, you know, a quarter of the world's population, a little less than that, a huge market.

Clearly the Chinese are very crazy about soccer.  They're not very good but clearly very crazy about it.  And so, you know, as long as the Olympics go off fairly smoothly, they'll be a very strong contender.

QUESTIONER:  Thank you so much.

OPERATOR:  Our next question comes from Joel Wishengrad of World Media Reports.

QUESTIONER:  Apparently the Chinese have been squandering what looks to be just the promotion for this huge sports activity over the next month.

We've had The Washington Post this morning again, with Joey Cheek, Joe Madison, highlight some of the foibles that the regime has had especially with how they're treating their dissidents.  Of course, they want this scripted for the month of August.

The difficulty also is that they're turning to Africa.  You've seen what they've done in Darfur.  You've seen them.  They're wiping out an entire civilization for instance with Nubia.  They're building a dam and reservoir.  They have their ins to Cambodia of course, Tibet recently and Nepal.

What is the significance of this particular buildup?  And is it going against the convention?  President Bush today in Seoul, South Korea, has also spoken about this.  And they keep vetoing various sanctions and such at the United Nations.

What in the short term is going to turn China to act more responsible, to the West as well as to the world populace, in its stance in the world?

Thank you.

ECONOMY:  Let me just say a couple of words on this pretty broad question.  I guess the question really is, you know, is China a responsible stakeholder?  And how does it define that?

I think part of the challenge is that China begins from a very different place than the United States and some other countries, in terms of understanding how to engage in the world.

And that is, it has a different set of priorities.  So its priority, you know, it has, we don't mix business with politics, and a very strong priority on sovereignty.

So when it's engaging in, you know, Myanmar, Burma, Myanmar or in Sudan or in other places, you know, it often says, you know, we're there doing business.  We're not trying to get mixed up in the political situation.

And on top of that, it will say for example in Zimbabwe that, you know, we're looking for the will of the people, to understand what the people of the country want.  We don't want to get again mixed up in the internal politics of others.

And it has a strong interest in that of course because it's always concerned that, in some way, its own sovereignty will be infringed upon and that other countries will say, you know, look at the human rights practices of China; look at what went on in Tiananmen, you know, we need to take action somehow internally in China to help change that situation.

So I think it has a different set of priorities.  And sort of making progress or changing, transforming those priorities is a long-term process.  There are certainly intellectuals in China -- you know, scholars and policy analysts -- who say that China needs to redefine its sense of its role in the world.

I do think that it has made some progress.  It's very active in peacekeeping now in a way that it never was, you know, a decade ago.  It's really -- that is transformative.  So it has -- you know, it's played a constructive role in many respects in North Korea.  You know, it has, under some pressure, tried to move things along in Darfur -- not to the extent that we would like.

But I think that it's going to be a mix of policies.  You know, Beijing has what it considers to be its own interests.  And where it can, you know, on the margins, find coincidence of interests with the United States and the EU or other members of the U.N. Security Council, it will.  It wants to be perceived as a constructive member.  But where it doesn't find that coincidence, it's very hard to move them along.

OPERATOR:  Okay.  And our next question comes from Michael Lelyveld of Radio Free Asia.

QUESTIONER:  Yeah, hi.  We touched on this before a little bit, but I'm wondering what the series of events and the kind of to-ing and fro-ing of decisions on how much access will be allowed and that kind of thing, what it means about decision-making and the leadership in China.

I'm trying to get at the question of whether China really -- whether the leadership really planned all along to lead the West into approving the Olympics and then promising access, promising freedoms that were never delivered; whether it, in fact, intended to essentially deceive or whether what we're seeing is kind of a temporizing, a back-and-forth struggle of decision-making on how much to allow; whether this is actually being a large cast of characters making decisions on how to conduct the Olympics from day-to-day.  And if it's the former, what is the response of China's partners going to be in the future, from a policy perspective in dealing with China?

SEGAL:  I think it's probably more likely the latter.  I think they made the promises and they then told people below them that, yes, we are going to ensure access, for example, to the Internet so that they can report on the Olympics.  And then it was left to people below that to figure out what that -- what it meant.  And you can see, you know, this repeating of the phrase, you know, "they have sufficient access for reporting of the Games."  And people at the kind of low levels where the decisions are actually implemented, I think, were, you know, either implicitly or explicitly given the signs that, you know, less access was better than more access, given the way that the Chinese systems work.  And that's how it was implemented.

So I think once it drew attention, once the human rights community and the international press started raising criticism of it, then it gets pushed up higher and higher to people who can make a decision to open the system more.

And I think that's how the -- generally the system works across the range of issues, as a constant negotiation and bargaining.  And the people below are more likely to play it safe and be more restrictive.  And the people at the top may have made the promises and not really thought about what the -- actually what implementation was going to mean.

ECONOMY:  Let me just offer a slightly different perspective.  I think, Michael, that you're right, that sort of it is a cast of characters.  But rather than a lower to higher kind of shift, I see it more as, you know, different groups and interests within the Chinese government pushing.  And I think that when you do get the kind of intense pressure that you saw -- the issue of Internet access -- that allows some of the more open officials, some that would like to see a more open China, come to the fore and use this.  Otherwise China's going to suffer an enormous embarrassment.

I think that the complicity of the IOC -- and whether you're talking about the Internet access or the human rights issue or even on the environment, this article that just came out recently talking about how the pollution is just fine, is -- to me suggests that there was, you know, a lot of high-level discussion that took place and a deliberate effort to keep things under wraps and under control and to sort of deceive, as you suggest.

So I think it's, you know -- Adam may be right, it's a bottom-up, but from my perspective I see it more as different actors, even at the same level, you know, pushing for different policies, and then with the pressure coming from the international community, allowing those more progressive actors to come to the fore and sort of exert some influence.

OPERATOR:  Our next question comes from Roger Runningen of Bloomberg News.

QUESTIONER:  Hi.  I have a question for both of you.  The president tomorrow at 9:30 in Bangkok or 10:30 p.m. East Coast Time tonight is going to make a major speech on Asia, but a lot of it is, the last part of it, is devoted to China, in which he's going to repeat probably fairly bluntly his remarks on religious freedom and the need for religious freedom and human rights.  And he's going to take kind of a prodding or a poke at China on U.S. opposition to detention of political dissidents, human rights advocates, religious activists.

A question for both of you.  What kind of impact will these remarks have, either short-term or long-term?  And how do you assess -- how are they being received by China?

ECONOMY:  I think in the short term it will clearly have a negative impact.  (Chuckles.)  I think the Chinese have, until recently, been able to count on President Bush as not really pushing very hard on these issues in many respects.  And, you know, he jumped up early and loudly to say he was excited to come to the games.  He didn't make a big fuss around the Tibet demonstrations and the Chinese handling of those demonstrations, unlike some of the European leaders.  So I think by and large, he's been considered a pretty good and strong friend of China.

So I don't think these remarks are going to be welcomed in any way, but I think over the long term, they're not going to make much of a difference, quite frankly, not just because he's going to be out of office in half a year, but because there will be those within the Chinese government that will understand that to some extent this is necessary for him to do domestically, that there's a -- you know, sort of a political reason for him within the United States to make these statements loudly and clearly.  So that's my take.

SEGAL:  I'm going to agree.  I think we can expect a pretty vocal response from the Chinese, given the response that they had from President Bush meeting with the five dissidents last week.  So the language and the rhetoric, I think, will be very angry.  But clearly, the speech will not be carried in China, and very few people will hear it and know of it.

And I think Liz is right that there are those within the government who will say, well, you know, this is basically directed at the Democrats and other Republicans who are critiquing the Bush administration's pushing a democracy agenda in China.  And so let's -- you know, we can scream for a couple days, but it's not going to really have any impact.

OPERATOR:  Okay.  Our next question comes from Jim Gaines (sp) of FLYP Media.

QUESTIONER:  Hi.  I'm interested in how the Olympics will play into the ethnic unrest, whether Uighurs or Tibetans.  Do you see a lasting effect emerging from their use of the Games?

And I guess it's a multi-part question.  One of them is how will change come to China?  What percentage of -- you mentioned 87,000 protests in the 2005-2006 period.  How much of that is ethnically based and how much is not?  And how will change come, especially with regard to ethnic minorities in China?  Mr. Segal said he said saw a couple of decades of authoritarian rule with some marginal reform.  I'd like to hear what Ms. Economy has to say about that.

And sorry for even one more part.  What would you -- what would a good U.S. policy be that would not poke them in the eye but actually try to help things change other than just engagement?

ECONOMY:  Okay, so I guess I'll take the first crack at it.  I think, in terms of -- I'll try to get all those parts.

In terms of the role of ethnic protests as part of the sort of -- what kind of -- what part of all protest ethnic protest is, I don't know, actually.  The way that the Chinese report their protests, they do do it by province and autonomous region, but we don't have access to that kind of reporting, which would give us a pretty good idea.

What we do know is that protests are, number one, rooted in illegal land seizure.  That's the number one sort of cause for social unrest.  And probably very closely behind that is environmental protest.  And that's really country-wide.  I don't think that there's any real sort of ethnic dimension to that.  So I don't know what part of the protest really is rooted in ethnic minority protests.

What I would say is that there's a different kind of protest that we've seen coming out of Xinjiang in particular, but also recently in Yunnan, in Kunming.  And that is, you don't tend to find the kinds of bombing and this kind of thing in the other parts of the country, so the ethnic protest does have a slightly more violent cast to it.  That's not to say that other protest in China doesn't turn violent.  It does.  You have police cars torched and all these things happening, officials attacked.  People die in these protests.  But the kinds of bombs and things, that doesn't seem to happen so much throughout the rest of the country.

What will it take to change China and bring it around?  Well, as I think I suggested, you know, my hope is for some enlightened leader at the top within China to bring reform about.  And I think that is the way that change will come to the ethnic regions of China.  There's really no indication within China's elite today -- again, Hu Jintao in particular -- that they are planning to have any sort of reform in Tibet, in Xinjiang; to encourage, you know, use of minority languages; to promote, you know, freedom of religion in these areas; to allow the Dalai Lama to come back -- any of the kinds of demands that even the more moderate people within these regions have been advocating, not the really violent protesting ones but just the moderate demands.

It seems to me that the policies are continuing: you know, exporting significant numbers of Han Chinese into these regions; you know, sort of extracting resources from these regions to benefit the rest of the country; you know, promoting economic development in these regions but again not really to allow a high degree of cultural economy.  And I just don't see any indication that that kind of reform is going to take place, until you have a broader kind of reform within the country.

SEGAL:  I would agree.

I think, you know, we can see what's happened since the protests in March and April in the Tibetan areas.  China's response has been kind of typical increasing of, you know, patriarchal education and keeping monks in monasteries and forcing them to undergo the education and this vitriolic kind of criticism of the Dalai Lama.

I don't think the long-term strategy for the Chinese has changed, as Liz said; moving Han into Tibet and waiting for the Dalai Lama to die quite honestly.  They did agree to these meetings.  But I think it was clearly tactical, to kind of just eliminate some of the criticism from the international community.

I do wonder with the -- in Xinjiang if we're entering into kind of a more violent, clearly a more violent period of protest.  You know, the experts that track the Uyghurs and the ETIN, the East Turkestan Independence Movement, have been fairly skeptical of some of the reports coming out of China, about how well-organized and connections to other terrorist organizations.

But a kind of sustained bombing campaign, if that were to be, to go on, I think, would seriously kind of change the nature of the Chinese response.  Although even a year ago we saw the Chinese seeming to step up in Xinjiang, arresting more people and some executions.

So I think the trends are fairly pretty negative in both areas.  I think, you know, after the protests in Tibet and the response from the West, we did see some bloggers questioning the Chinese strategy and speaking with some embassy, about Tibetan concerns or Tibetan complaints.

But you know, as Liz said, we haven't seen anything like that in any of the people that are leading China right now.  And so the question is, you know, people at the next generation below, maybe they will be more empathetic.  But we haven't seen any evidence yet.

OPERATOR:  Our next question comes from Garrett Mitchell of the Mitchell Report.

QUESTIONER:  Hi.  In the sea of these rather cosmic questions, a very small micro-question occurred to me.  And I should know the answer to it but I don't.

Does Taiwan send athletes to these Olympics?

ECONOMY:  They do.

Right, Adam?

SEGAL:  They do.

ECONOMY:  Yeah.

SEGAL:  So the issue has been how the Chinese refer to them.

ECONOMY:  Right.

SEGAL:  They traditionally are referred to as Chinese Taipei with the agreement.  But in the Chinese press with the Chinese commentators, when they use the Chinese word, they use -- (remarks in Chinese) -- which means basically kind of referring to the Chinese state, as opposed to the term that the Taiwanese prefer, which is -- (remarks in Chinese) -- which kind of refers more to the Chinese people.  The Taiwanese have complained and it seems that officially now they'll be referred to -- that second term.  But the Chinese commentators and the press seem to still be using the first term.

But the larger issue is that with the improvement of the relations across the strait, with the elections over -- with President Ma and the beginning of the charter flights, this seems to be an issue that people don't really want to have blow up.

QUESTIONER:  Great.  Thanks.

OPERATOR:  Again, if you would like to ask a question, please press the star key followed by the one key on a touchtone phone now.

Our next question comes from Gillian Wong of Associated Press.

QUESTIONER:  Hi.  I'm sorry; I was momentarily disconnected and so I'm not sure if I am asking a question that has been asked before.  But I was wondering what you think of how China will react to President Bush's comments on urging China to allow political freedom for its citizens.

ECONOMY:  We did mention that, just in brief.  I think Adam and I were pretty much on the same page, that they will not react favorably -- there will be some reasonably tough commentary that will come out of the Chinese government and the Chinese media -- but that over the long term it won't really have an impact on U.S.-China relations or even on Chinese perceptions of President Bush, because there will be people within the Chinese government that will recognize this as primarily an effort by President Bush to sort of assuage the concerns of people in Congress and human rights organizations about the Olympics and human rights in China.

OPERATOR:  Okay.  And there are no more questions at this time.

ROSE:  Liz and Adam, let me jump in here with one.  There's a leader in The Economist this week that basically says the Olympics won't have done anything particularly good for Chinese political and economic development -- any good trends will have been generated independently.

Is there -- I mean, do you guys agree with that?  Is all the attention, the hoopla, the so forth attending the Olympics really going to have no significant lasting impact one way or the other?  Or if it does have a lasting impact, will it be negative or positive for overall Chinese development?

ECONOMY:  Well, probably we'll have to wait and see on that one, I guess.  But I think that generally speaking and perhaps not surprisingly, my guess is that at least at this point in time -- I mean, we have to see what transpires throughout the Games, right?  But at this point in time, again, what had been hoped for in terms of the environment, in terms of sort of broader political freedoms, in terms of the Internet, et cetera, those very basic promises that China seemed to make back in 2001, none of them has come to pass.  All of them require some form of real reform, real change.

So I think the best hope at this point would be if, you know, dissidents, intellectuals, et cetera, in the wake of the Games, say, you know, "The Games did not have as much luster as we all had hoped, and why is this?"  And then that you were able to engage a broader discussion among the Chinese people, populace, and within the government about China's face to the world and about how, you know, what China thought was so important -- say, the Chinese leadership thought was so importantly, namely, the maintenance of tight security and getting a lot of gold medals -- was perhaps not what mattered most to the rest of the world.  So that, to me, would be the one chance for this to somehow serve as a springboard, as a launching pad for real, sustained change within China.

SEGAL:  I think, you know, Liz is right; we have to wait to see how it goes off.  I think the impact will be less than kind of these -- what we expected or hoped for in political reform, but more on the Chinese people's perception of how the rest of the world sees them or their place in the world.

And I think if the games go well; if, you know, China does well; and if the rest of the world seems to be, you know, happy that the games went well, then this might kind of cut into the kind of very negative, nasty xenophobic nationalism that we saw in the kind of protests around the torch and then may kind of take some of the edge off of this and the kind of nationalist response that we saw.  And that might be the kind of -- the most important kind of long-term impact.  And the Chinese will -- you know, the games will go, and then they'll return to their kind of normal lives, and that will be it.

And if the games go badly; if, you know, people are seen to both kind of be trying to disrupt them and kind of enjoying the fact that they're being disrupted or the failure of the Chinese, then I think, you know, all bets are off, and then we kind of enter a pretty nasty kind of period of relations.

ROSE:  Let me actually follow up on that, because there seems to be this odd sort of dual aspect of the nationalism, right?  If there's a positive aspect and a cosmopolitanism in the games themselves, of a kind of "Okay, we're going to open to the world; we're going to be our -- this is going to be our debutante ball; we're going to come out -- everyone's learning English.  There's all this spotlight on us" and so forth.  All that's very strong cosmopolitan.

But there's also this nationalist focus:  "We're going to come out not just by throwing a party for the world but by having our national team do very well and making sure everything goes off well and so forth."

So it seems like the -- you could have this be a springboard towards an openness to the world, but also towards a sort of negative nationalism that would define itself in opposition to the rest of the world.  Am I wrong on that, or is that -- which side will triumph, or do we know?

SEGAL:  Well, I think that's been present from the very beginning.  I think both of those concerns have been there, right?  If you looked at -- one of the earlier mottos for the games were basically "New Beijing, new Olympics," or "great Olympics."  But in Chinese it was translated as "New Beijing, new Olympics," kind of suggesting that China would try to change the Olympics and that, you know, Chinese culture and all these other things would have an impact on the world, as opposed to the world having an impact on China.

But clearly, though, you know, "One world, one dream" has the kind of cosmopolitan, utopian kind of sense to them.

And so I don't think we know.  I think, as I said, it will depend upon how the games go off and all of these things are going to, you know, exist.  There are going to be those who push the more nationalistic interpretations of it and those, I think, who are going to look towards the more -- you know, the good of the games and kind of introducing China to the world, or the world to China, in, I think, a more cosmopolitan sense of it.

ROSE:  Okay.  If there are no more questions in the queue, then --

OPERATOR:  Actually, we have one more question, if you'd like to take that.

ROSE:  Okay.  Sure.

OPERATOR:  All right.  The next question comes from Tony Ping (sp) of Singtao (sp).

QUESTIONER:  Hi.  I have a question for both of you, following up the Taiwan issue, because we know that Taiwan now gets that -- you know, the Chinese government officially -- they announced that they will use Chunghwa Taipei (sp) to call Taiwan.  But instead when Taiwanese athletes, they walk into the opening ceremony, they're going to use C -- you know, the order of the team -- they're going to use C, which means China, instead of T, Taiwan, what Taiwan used to use.

So do you think this is going to, you know, impact the future, you know, no matter -- Taiwan joined any kind of international group or any kind of sport event -- Taiwan going to be like always using China, or it's going to -- you know, what's the impact on this?

SEGAL:  Yeah, my understanding of this was this was basically that the hosted -- host country can decide how these are -- the introductions occur and that China's based this on stroke order.  And so that's why, you know, the C came before the T, given that the -- you know, the use of Chunghwa (sp), and Chunghwa (sp) would be the same.

I don't think it's going to be a huge deal.  I -- only because Ma, I think, has said that he is happy with the -- you know, the way that the compromise has worked out.  And I think right now both sides are leaning towards trying to make relations better.  If -- you know, if relations were bad, then yes, this would be kind of a longer-term irritant, and it would play it out.  But I think, given the other political and economic trends pulling the two sides together, this will be an irritant clearly to more independence-minded Taiwanese, but politically it won't have a long-term impact.

QUESTIONER:  Thank you.

ROSE:  Okay.  And with that, if there are no more questions, we will leave you all to the games themselves.

And thank you very much for being here.  Thank you, Liz and Adam, for speaking with us.  And thank you all for attending.  So long.

OPERATOR:  This concludes today's teleconference.  You may disconnect now.

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