BEIJING — For three decades, China has fueled its remarkable economic rise by becoming the world’s workshop and unleashing a flood of low-priced exports. But faced with a possible global recession and weakening demand for Chinese exports, the question now is whether the ruling Communist Party can prevent the financial crisis from derailing the country’s economic miracle.

This question is pressing not just for China but also for the rest of the world. American officials and many economists say continued Chinese growth is vital to the global economy as the United States and Europe face severe downturns.

Yet to navigate the crisis, many analysts say, China will need to recalibrate its economic model, stoke domestic investment with heavy government spending and promote policies to increase consumer demand in a nation known for high savings rates…

A long look at American capitalists in Shanghai:

“Shanghai is a fifteen-hour flight from New York but so much farther.

Comiskey landed here for the first time in 2002, when he was working on his M.B.A. at Stanford. A group of students decided to tour industrial China, wanting to see what hypercapitalism looks like, and out of so many cities, massive and teeming, Shanghai—and its eighteen million inhabitants—dug its elbows deepest into Comiskey’s ribs.

In the rain, the city looks like the Los Angeles of Blade Runner. Every glass-and-steel skyscraper is taller and gaudier than the one thrown up in the weeks before it; spotlit billboards and an overabundance of blue neon turn dusk into dawn; a high-speed maglev train, the world’s fastest, rockets from the futuristic airport into towering Pudong, an entirely new section of the city that has risen double-time out of the marshes along the river, an instant metropolis. Walking wide-eyed through the bustle, Comiskey felt the crackle of pure, unhinged commerce. ‘It felt like the frontier, like the Wild West,’ he says now. ‘It felt electric.’”

“‘So,’ he says, happily, ‘you are one of my customers.’ He fishes out one of the little bobbing cylinders with his finger and, shaking the water off, presents it to me as a gift.

I’m not sure what to make of my own excitement. The thing is totally worthless, the cheap component of a cheap product that I already own, and yet for a moment it’s as though some breach in my universe has been repaired, as if the arc between two oppositely charged poles has been jumped by an invisible surge. Then I notice that the workers I’ve interrupted are watching me, a stranger mesmerized by a piece of plastic. It’s clear that they understand nothing that Chan and I have said, and judging from their expressions, I’d guess that no one has explained to them who I am. I nod hello. They respond by looking away. …

…There are no obvious signs of malfeasance on display in his factory. No child laborers. No suspicious fumes. No lead paint. No paint at all, in fact, since Chan outsources any surface painting he needs done. But the truth is, I really have no way of knowing what goes on in Po Sing when strangers with notebooks aren’t poking around.”

A seasoned reporter remembers the old Macau, and sees it now:
“I first visited Macau 30 years ago to report on criminal gangs called triads, then responsible for much of the city’s violent crime and loan-sharking. Brightly painted shops that once served as brothels ran the length of Rua da Felicidade in the old port district. Around the corner, on Travessa do Ópio, stood an abandoned factory that had processed opium for China. A mansion built by British merchants early in the 19th century was still standing, as was the grotto where in 1556 Portuguese poet Luis de Camões is said to have begun Os Lusiadas, an epic tale of Vasco da Gama’s explorations of the East.

In 1978, residents described the place as “sleepy”; its only exports were fish and firecrackers. Four years earlier, Portugal had walked away from its territories in Angola, Mozambique and East Timor and by 1978, was trying to extricate itself from Macau as well. Secret negotiations concluded in 1979 with an agreement stipulating that Macau was a Chinese territory “under Portuguese administration”—meaning that Portugal relinquished the sovereignty it seized after the Opium War in the 1840s but would run the city for 20 more years. The Portuguese civil servants, army officers and clergy then living there seemed content to take long lunches and allow their enclave to drift.

The police, who wore trench coats and rolled their own cigarettes, allowed me to tag along on what was described as a major triad sweep…”

China cut interest rates and eased limits on lending:

“HONG KONG — After five years of tightening monetary policy to fight inflation, China abruptly reversed course on Monday, cutting interest rates and easing bank lending restrictions in response to signs that growth in the Chinese economy was slowing.

China’s restrictions on large movements of money in and out of the country and its immense reserves of foreign currency have insulated its financial markets from the troubles shaking Wall Street. But this has not been enough to protect China from a global economic downturn.

China’s exports have slowed sharply, particularly when adjusted for inflation and expressed in China’s currency. Real estate prices are weakening, particularly in coastal cities that depend on exports, and China’s stock market has lost three-fifths of its value since October.”

A roundup of Chinese illustrations of the impending Coke-Huiyuan deal:
“It’s a reminder that western companies trying to acquire well-known Chinese brands are almost always behind the PR eight-ball…
Now, from around the Chinese Internet, some of the caricatures and cartoons making the rounds (inspired by one particularly fine example on the WSJ blog). You may detect a certain theme…”

Brief thoughts on Philip Pan’s new book, Out of Mao’s Shadow:

“Pan’s book paints a pointillist picture of the country, collecting individual stories gathered during his seven years as the Washington Post’s correspondent in Beijing. He gradually builds an image of a rigid, creaking complex of big business, political control and nationalist myth-making that is occasionally, movingly, but all too rarely cracked by the individual struggles of lawyers, doctors, academics, bloggers, film-makers and aspirant unionists and democrats.”

Beijing’s Olympic organizing committee is taking strange measures to keep its top sponsors in view:

“BEIJING — At the Olympic Games here, you drink Coca-Cola beverages, eat McDonald’s food, ride in Volkswagen sedans and watch events on giant Panasonic video screens.

Beijing organizers have gone to great lengths — employing a dedicated staff armed with plenty of tape — to ensure that companies providing otherwise important services but who aren’t official sponsors don’t upstage the companies that are. See photo.
You also take ———- elevators, are protected by ———- fire alarms, cool down thanks to ———- air conditioners, and wash your hands under ———- faucets.

To ensure that only the companies that pay millions of dollars to be official Olympic sponsors enjoy the benefits of exposure in Olympic venues, organizers have covered the trademarks of nonsponsors with thousands of little swatches of tape.”

A discussion with torchbearer Helen Zia and journalists John Pomfret and Christian Parenti, covering China’s middle class and the impact of the Olympics on China’s human rights record.

Corporations are leading the way in new forms of censorship:

“A popular acronym in government, big business and the military for today’s centralised surveillance technologies is ‘C4I’ (Command, Control, Communications, Computers and Intelligence). The top shelf of the technology market offers solutions that integrate closed circuit television with criminal records databases, national health insurance with biometric ID cards, holiday travel bookings with international terrorist lists and so on.”