LONDON - Two steps forward, one back. That's the pattern with modern China, and today looks like a "one back" moment.
First Chinese leaders pursue a beggar-my-neighbor currency policy. Next they denounce as "obscene" the Norwegian Nobel Committee's award of the Peace Prize to Liu Xiaobo, a literary critic and former professor locked up for 11 years for saying what he thinks.
When the world objects, they put his wife under house arrest. For good measure, this nation of 1.3 billion souls threatens to retaliate against the 5 million good folk of Norway. And who provoked this loathing? An author whose books include "The Fog of Metaphysics," a review of Western philosophies.
Whatever the qualities of the Chinese leadership, oversensitivity to world opinion isn't among them. The coincidence of the Nobel controversy with the currency war will make many people stop to ask where the new China is going. The answer: in two directions at once.
Observing Beijing is like looking at a trick postcard that carries two pictures, depending on the angle of vision. One shows a reformist China opening up to the world. The second reveals a thrusting superpower that's hell-bent on dislodging the United States from its No. 1 spot and cares nothing for democracy.
Liu's brutal treatment rouses natural fears for the future, showing how far the authorities will go to crush dissent. The case dates to 1989, when Liu was a visiting scholar at Columbia University in New York. That April, he flew back to Beijing to join the peaceful student protesters in Tiananmen Square.
For Beijing, his worst crime is this link to an uprising that the Communists desperately want the world to forget. Yet the image of the Chinese colossus once again bearing down on a single individual revives the most potent image of that revolt: The footage of one lone protester standing fearlessly in the path of tanks.
Currencies apart, Chinese economic policies these last few years have often been enlightened and intelligent. The treatment of Liu is neither. A criminal, Beijing calls him, subverting the power of the state. And why?
Because he helped draft Charter 08, an open letter calling for such things as direct elections, freedom of speech and an independent judiciary. In 2008, Liu joined some 300 other inoffensive intellectuals, simple citizens and even Communist Party members in signing the document.
Upon which the gigantic Communist machine took fright. A single spark, after all, can start a prairie fire, as Mao Zedong said in his revolutionary days. Yet this makes no sense in modern China. Like it or not, Chinese people as a whole don't lie awake at night fretting over the absence of full democracy. Most go to sleep with more contentment and fuller bellies than any generation of Chinese for 60 years.
It is Liu's stubbornness, one senses, that riles the Communist leadership, together perhaps with the dangerous reasonableness of his approach. They jailed him for months after the Tiananmen uprising was crushed and later sent him to a labor camp for three years. Yet he still won't kowtow.
What is there to recant, though? Liu isn't preaching violent revolt. On the contrary, he insists that the road to democracy must be "gradual, peaceful, well ordered and controlled." Many principles articulated in Charter 08 are enshrined in China's own constitution, which guarantees "freedom of speech, of the press, of assembly, of association, of procession and of demonstration," as the Nobel committee wrote.
As far as China's relations with the West go, all is far from lost. There have been zigzags in Chinese policy before, and Beijing's overreaction to the Nobel award runs against the trend. My last visit to the country four months ago confirmed the obvious: that China today is freer and more prosperous by far than at any time since the 1949 Communist revolution.
That freedom in everyday life is creeping irresistibly forward, and clumsy governmental tactics only risk stirring up more active opposition. A few days ago, Xia Yeliang, a prominent economics professor at Beijing University, urged people to put photos of Liu in their car windows in silent protest, according to Paris daily Le Figaro.
The trick for the West will be to stand firm on both its currency and human-rights concerns without provoking one of Beijing's periodic spasms of nationalism. People say we mustn't cause the Chinese to lose face by pushing them to the point where retreat becomes impossible. Yet the Obama administration and other Western governments have their own reason for seeking to save face: Elections, we call them.
George Walden, a former Member of Parliament, witnessed the Cultural Revolution as a British diplomat in Beijing in 1966-69.
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