News » Society » Co-op's 'Del Boy car boot sale' of drugs worth thousands of pounds

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• Co-op's 'Del Boy car boot sale' of drugs worth thousands of pounds
• American dream rise of £12 billion Facebook bride: Father of Zuckerberg's new wife was Asian refugee who worked 18-hour days in Chinese takeaway
• I won't raise a cup of warm wine to this posh pensioner
• Kelly Clarkson: The superstar next door
• I won't raise a cup of warm wine to this posh pensioner
• RUCHIR JOSHI: To view crass India visit our neighbours
• British pentathlon ace Fell stakes Olympic claim after winning silver in China
• TONY HETHERINGTON: Lies are the reality behind a 7 per cent dream
• How to make the best of any fall in the base rate if you have a mortgage
• Bank of England governor Sir Mervyn King hosts secretive summit on euro crisis
• Joe Biden praises the '9/11 generation' of West Point graduates and tells the cadets to prepare for new threats...like China
• Cable car rescue
• 3 die in collision
• Diesel leak fixed
• Weather forecast covers islands
• Woman detained after Indian held as captive
• The China challenge—— Why do mergers and acquisitions so often fail in China
• China Aims to Support IPO Market
• U.S. Declines to Name China a Currency Manipulator Amid ‘Undervalued’ Yuan
• Before China’s Transition, a Wave of Nationalism

Co-op's 'Del Boy car boot sale' of drugs worth thousands of pounds Posted: 26 May 2012 06:48 PM PDT The retail giant held the sale in a car park at its distribution centre in Stoke-on-Trent after telling its 750 pharmacy branches to return goods totalling £1.7million that were unsold or close to expiry date.

American dream rise of £12 billion Facebook bride: Father of Zuckerberg's new wife was Asian refugee who worked 18-hour days in Chinese takeaway Posted: 26 May 2012 05:35 PM PDT Facebook founder Mark Zuckerberg's bride Priscilla Chan was mainly raised by her grandmother because of her parents' grueling work at their Boston restaurant.

I won't raise a cup of warm wine to this posh pensioner Posted: 26 May 2012 05:06 PM PDT Call me sour, call me bitter, call me ungrateful – it's nothing new. The loneliness of being a long-distance republican inures me, writes Suzanne Moore.

Kelly Clarkson: The superstar next door Posted: 26 May 2012 04:01 PM PDT America's first ever Idol KELLY CLARKSON has been picked apart for being too fat, too thin, too normal… As she tells Alan Jackson, it's taken ten years to say: 'I'm just me – take it or leave it!'

I won't raise a cup of warm wine to this posh pensioner Posted: 26 May 2012 03:41 PM PDT Call me sour, call me bitter, call me ungrateful – it's nothing new. The loneliness of being a long-distance republican inures me, writes Suzanne Moore.

RUCHIR JOSHI: To view crass India visit our neighbours Posted: 26 May 2012 03:19 PM PDT I've come back from a neighbouring country that lies to the east of us. The internet situation in that land being slow almost to the point of non-existence on some days.

British pentathlon ace Fell stakes Olympic claim after winning silver in China Posted: 26 May 2012 02:30 PM PDT Heather Fell won the silver medal at the World Cup final in Chengdu, China, to keep her hopes of making the Great Britain Olympic team alive.

TONY HETHERINGTON: Lies are the reality behind a 7 per cent dream Posted: 26 May 2012 01:44 PM PDT A scheme called Royalty 7, run by Finance Your Dream Limited from an address in London, is offering seven per cent interest compounded daily. It sounds like another scam so I hope you can warn readers.

How to make the best of any fall in the base rate if you have a mortgage Posted: 26 May 2012 01:43 PM PDT The IMF has recommended more quantitative easing – pumping new money into the economy – and a cut in the base rate. Such moves could have big implications for consumers, especially mortgage borrowers.

Bank of England governor Sir Mervyn King hosts secretive summit on euro crisis Posted: 26 May 2012 01:40 PM PDT London will this week host a private global summit on the world financial crisis amid mounting pressure on eurozone economies.

Joe Biden praises the '9/11 generation' of West Point graduates and tells the cadets to prepare for new threats...like China Posted: 26 May 2012 02:04 PM PDT Vice President Joe Biden told the 972 Army cadets who graduated from the U.S. Military Academy at West Point on Saturday that they deserve special praise because they decided to enter military service fully aware of the danger of war after the Sept. 11 terrorist attacks

Cable car rescue Posted: 26 May 2012 09:26 AM PDT ALL the 78 people who had been trapped in cable cars at a mountain scenic resort in the city of Guilin, Guangxi Zhuang Autonomous Region were rescued by 4:30pm yesterday without any casualties, said rescuers with Guilin tourism bureau. More than 200 people were involved in the rescue effort. The local fire service received a report at around 11am that dozens of people were trapped at the Yaoshan mountain scenic spot in Guilin. The accident was probably caused by a power failure, said rescuers.

3 die in collision Posted: 26 May 2012 09:26 AM PDT THREE people were killed and another two slightly injured after a car and two taxis collided just after 3am yesterday in Shenzhen, southern China's Guangdong Province, local police said. Three people died on the spot in one of the cabs, which caught fire after the collision, said the traffic police. Initial investigations suggested the car driver was drunk, said police. Investigations are continuing.

Diesel leak fixed Posted: 26 May 2012 09:25 AM PDT A BROKEN pipeline in the city of Zibo in Shandong Province leaking diesel was repaired yesterday morning, said officials. On Friday, a construction team from the city's water company damaged a section of the oil pipeline near the Jinan-Qingdao Expressway while working on an adjacent water supply pipe. A 7-meter-deep hole was dug at the site to collect the leaked diesel and avoid further pollution, said local officials.

Weather forecast covers islands Posted: 26 May 2012 09:25 AM PDT HAINAN'S meteorological bureau said yesterday that it has started issuing weather forecasts for two islands and one reef in the South China Sea. The bureau in the southern island province said it started forecasts for Yongxing and Huangyan islands as well as Yongshu Reef on May 16. "It is important to improve weather forecasts for the South China Sea to help ensure the safety of passing vessels and offshore production," said Cai Qinbo, director with the Hainan provincial meteorological station.

Woman detained after Indian held as captive Posted: 26 May 2012 09:24 AM PDT POLICE in Yiwu City, Zhejiang Province, said they have detained a Chinese woman after an Indian man was held captive in a debt dispute. The suspect, surnamed Wang, a Jiangxi native, is a former employee of an Indian businessman identified as Faisal. She began buying products for him in Yiwu in 2009, , Xinhua News Agency reported yesterday, citing local police. Faisal fell into arrears in salaries and payment for goods last year and the sum reached 450,000 yuan (US$72,580). Wang and a colleague paid for products to help Faisal weather the difficulty. Wang repeatedly asked for the money back, but did not get the cash, reported Xinhua. In March, She learned that Faisal had sent Indian employee Danish Qureshi to Yiwu and asked for his help in getting the money back, again without success. In May, Wang and her boyfriend took Qureshi to Wang's rented apartment, held him there and called Faisal demanding the arrears before they would release him. Two days later, after being alerted, Yiwu police found Qureshi unharmed.

The China challenge—— Why do mergers and acquisitions so often fail in China Posted: 26 May 2012 08:06 AM PDT Source: 21 Century Business Herald Most industries are far more fragmented in China than in developed countries. Each city or province may feature a full portfolio of breweries, pharmaceutical makers and real estate developers – a vestige of central planning and China's lack of nationwide sales and distribution networks. Since reforms began in 1978, however, Chinese industries have begun folding in on themselves. Market leaders are gaining capital and swallowing up smaller competitors, making China a land of milk and honey for mergers and acquisitions (M&A). According to research firm Zero2IPO, companies completed 1,157 M&A deals in China in 2011, up from only 622 in the previous year. But this number could have been much higher. "M&A is not active enough in China," said Gary Liu, deputy director of the China-Europe International Business School's Lujiazui Institute of International Finance. "For many industries, actually there are many potential opportunities for integration, but it doesn't happen with very high efficiency." M&A advisors agree that the failure rate of deals in China is higher than in developed countries, for a variety of reasons, including the lack of legal transparency, inflated company valuations and cultural barriers. "Typically in the US and the UK, of the deals we get involved in, about 80-90% go through," said Curt Moldenhauer, a partner in PwC's Transaction Services Group in Shanghai. "In China, it's about 44% – well south of what you expect in a developed market." One of the biggest barriers is a lack of transparency that makes suitable acquisition targets harder to find. In developed markets, industry leaders like General Electric receive thick books daily filled with M&A opportunities, Moldenhauer said. In China, however, little company information is available, even online. Advisory companies often have to go out and "beat the bushes" in lower-tier cities to identify good targets. China's lack of transparency and rule of law create a slew of other obstacles for the M&A process. Many acquirers are unable to detect non-compliant practices such as accounting fraud, tax evasion or bribery, or to sue for compensation once they do. Acquirers also have difficulty accurately pricing the target company. Chinese executives have earned a reputation for demanding sometimes outlandishly high prices for their companies. In the US, many non-tech companies are acquired at a price-to-earnings (P/E) ratio (the price per share divided by the company's per share profit) in the high-single or low-double digits. But some Chinese companies demand many times that. Some are right to have high expectations, owing to their country's fast economic expansion. But others are not. "Chinese companies have unrealistic expectations oftentimes about the value of their business. Part of that is due to the fact that we have an irrational capital market here in China," Moldenhauer of PwC said. Because China gives its citizens only limited options for investing their money, more funds are parked in domestic stock markets, driving up company valuations. From 2008 to 2011, the average P/E ratio of A-shares on the Shanghai and Shenzhen stock exchanges was 20 and 33, respectively; the average P/E ratio of shares listed on Hong Kong's main board, which is not subject to the mainland's strict capital controls, was 13. The immature financial system results in far fewer deals led by private equity firms than in developed economies. China lacks a high-yield corporate bond market and well-developed IPO and secondary markets, all necessary for PE firms to raise capital to buy a stake and later exit their investments. There is also little appetite for restructuring companies, which often requires mass lay-offs anathema to China's strict labor laws. "[Restructuring] is just not part of the business, and/or you can't get a large enough stake to make an impact," said Tony Skriba, an analyst with Z-Ben Advisors. Finally, China's rapid development can also present obstacles. The market is changing so fast that sometimes deal negotiations cannot keep up, said David Lee, a partner at Boston Consulting Group. Companies that spend eight months to a year and a half to negotiate a deal may emerge to find that the market has already changed dramatically. Bottom fishers Cultural barriers can also be a stumbling block for cross-border M&A deals, especially among Chinese companies shopping for acquisitions abroad. Chinese companies completed 110 cross-border deals in 2011, up from 57 the year before, according to Zero2IPO; slightly more than half were foreign-funded deals. But behind each successful acquisition a Chinese company made abroad last year, there were many more failures, wrote Clare Chen, an analyst at Zero2IPO. "The volume of foreign transactions is obviously increasing, but it's worth noting that Chinese companies abroad have one of the world's highest failure rates." One barrier for both domestic and cross-border M&A is the deficit of management talent at Chinese companies. Gary Liu of CEIBS blamed this shortcoming for the failure of TCL's joint venture with France's Thomson Electronics, then the world's largest TV manufacturer. "TCL aggressively integrated with Thomson," Liu said. "But unfortunately, the Thomson people, they didn't respect the Chinese at all. The result was a disaster; TCL lost a huge amount of money." Facing the gap China's leading companies have taken note of this example and are adjusting their strategies to preserve the brand strength and technological know-how that motivated them to make overseas acquisitions in the first place. Chinese car company Geely chose to remain a passive shareholder after acquiring Sweden's Volvo, Liu said, while computer maker Lenovo moved its headquarters to South Carolina to show respect for US employees after it acquired IBM's PC division. "I think this is the right strategy for Chinese companies, because we have to admit the huge management gap between Chinese companies and Western companies," Liu said. "No matter how much money you have, you're still a student in front of the Western companies." Would-be acquirers of Chinese companies face many obstacles. But contrary to conventional wisdom, this list does not typically include government intervention, said Moldenhauer of PwC. While the rejection of Coca-Cola's bid for juice maker Huiyuan in 2008 due to the Chinese anti-monopoly law still looms large in the public consciousness, that example is far from representative, he said. "How many cases have been rejected under the anti-monopoly law? One. That's it." There are limitations, of course: Foreign companies are allowed to take only a 50% stake in some strategic sectors, and are banned entirely from others. The government has also adopted new priorities for investment to encourage environmentally-friendly and high-tech industries. But these rules are clearly published in China's National Security Review and Foreign Investment Catalog. Within those guidelines, the government is not really blocking anything, Lee of Boston Consulting Group said. China is now looking to attract technology, brands, international distribution channels, management experience and intellectual property, rather than straight-up capital. "It's difficult to answer the question, 'Is it getting worse or better?' I think it's different," said Moldenhauer of PwC. "If you're planning on building a tire factory in Shanghai, it's pretty tough… But talk to anyone who wants to open a high-tech company in Chongqing, they're ecstatic." Liu of CEIBS cautioned that local governments can be an obstacle to some deals, particularly when labor comes in the mix. He cited the attempt by electronics company Midea to acquire Little Swan, a washing machine maker in Wuxi, in 2008. Workers who were slated to be fired surrounded the factory in protest, and after several days of tension Midea gave in. "In this situation the local government put pressure on the acquirer. For the local government, stability is more important than anything else," Liu said. In the dance Some of these barriers are sure to fade in the years to come, as Chinese companies acquire better management techniques and the country gradually opens its capital markets. But some obstacles, like China's unclear legal environment, will be slower to change. Doing deals in China may be tough, but it's better than the alternative. No matter how hard the deal process may be, domestic market leaders need to consolidate their positions, and foreign companies want access to the market. "People are still buying. I think that's the good news," Lee of Boston Consulting Group said.

China Aims to Support IPO Market Posted: 26 May 2012 08:11 AM PDT Source: Wall Street Journal By Shen Hong SHANGHAI—China's securities regulator said it will take measures to support initial public offerings and refinancing of private companies, part of the government's broader campaign to tap the country's private sector for help at a time of weakening economic growth. The move is the latest in a series of measures unveiled by Beijing in recent weeks to stimulate the world's second-largest economy while at the same time opening up greater space for the country's private sector, which is a key element in the authorities' long-pledged financial reforms. In a statement Friday, the China Securities Regulatory Commission said it will also lower relevant regulatory thresholds in order to support overseas listings of private enterprises. In addition, it will simplify the approval process for private companies to raise funds in the domestic corporate bond market. The CSRC said it will also encourage private capital to invest and take stakes in the country's mostly state-owned securities and futures companies. The securities regulator said it will support private capital in its effort to accelerate industry consolidation and upgrading through mergers and acquisitions. The CSRC said it will also continue to support private capital's investment in domestic asset management companies. Also Friday, China's state assets regulator said it would encourage more private investment in state-owned enterprises to aid their restructuring. The invitation to private capital comes at a time when the profitability of the state sector is flagging. According to figures from the Ministry of Finance, profits earned by central state-owned enterprises fell by 8.6% from a year earlier in the January-April period to 669 billion yuan ($106 billion). Last week, the Ministry of Railways issued a statement saying it will invite private investment in the railway market, which has traditionally been one of the most state-dominated sectors of the Chinese economy. In a bid to attract new capital, the highly-indebted Ministry said it is considering establishing railway-industry investment funds, new initiatives to issue railway bonds, and encouraging initial public offerings of railway companies. And on Wednesday, China's State Council, its cabinet, said it would encourage private investment in industries including energy, telecommunications, education and health care.

U.S. Declines to Name China a Currency Manipulator Amid ‘Undervalued’ Yuan Posted: 26 May 2012 08:17 AM PDT Source: Bloomberg News By Cheyenne Hopkins and Ian Katz The U.S. declined to brand China a currency manipulator, while asking the world's second-largest economy to strengthen the "significantly undervalued" yuan. In its semi-annual report to Congress on exchange-rate policies, the Treasury Department said yesterday that it will continue to "closely monitor" the pace of yuan appreciation and push for "policy changes that yield greater exchange-rate flexibility." The Obama administration says China's policies keep the yuan undervalued and produce an unfair advantage in global trade. Politicians including presumptive Republican presidential nominee Romney and Senator Charles Schumer, a New York Democrat, have complained that the administration should be more aggressive in pushing China on the currency. No country has been designated a manipulator by the U.S. since China in 1994. "With recession in Europe starting to slow China's economy, now is not the time to rock the boat with one of America's most important trading partners," Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said in an e-mail after the report was released. "Greater foreign-exchange rate flexibility and the need to monitor are going to be in this report for the next several years, but the nuclear option to declare China an outright manipulator is unlikely to be used with the global outlook so uncertain right now," Rupkey said. European Crisis In its report, the Treasury said the deepening European crisis "is a significant risk to the U.S. outlook as our recovery remains vulnerable to events abroad." A "tightening" of the region's financial markets could "adversely impact the willingness of U.S. banks to lend and invest." The Treasury said the Chinese yuan has appreciated 40 percent against the dollar, after taking inflation into account, since China initiated currency reform in July 2005. This year through May 15 the Chinese currency was "virtually flat" against the dollar. "It is in China's interest to allow the exchange rate to continue to appreciate, both against the dollar and against the currencies of its other major trading partners," the Treasury said in the report, which was originally due to be released April 15. The Treasury frequently delays the report. The last one, due Oct. 15, was released Dec. 27. The previous one, due April 15, 2011, was released May 27. Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics, said the report was overly critical of China. More Credit "Treasury is making a mistake in not giving China more credit for the appreciation that it has undertaken and the large reduction in its global external imbalance," Lardy said in an e-mail. "They should not stick with the 'significantly undervalued' language." The Treasury is required to report twice a year on exchange-rate policies of major trading partners and enter into direct talks with those it designates as manipulators. China's economy may grow in 2012 at its slowest pace in 13 years, a Bloomberg News survey showed earlier this month, as Europe's debt crisis curbs exports, manufacturing shrinks and demand for new homes wanes. China's gross domestic product expansion, which dropped to 8.1 percent in the first quarter, may further slip to 7.9 percent in the three months ending in June, according the survey. That would be the sixth quarterly deceleration. IMF Projection The International Monetary Fund last month projected that China would grow 8.2 percent this year and the global economy will expand by 3.5 percent. The yuan dropped for a third week on signs China's economy is slowing and as concern that Europe's debt crisis is worsening hurt demand for riskier assets. The yuan fell 0.24 percent this week to 6.3439 per dollar in Shanghai, according to the China Foreign Exchange Trade System. The currency was little changed yesterday and touched 6.3525, the weakest level since Dec. 20. It has declined 0.53 percent in May, heading for its worst month in at least five years. The Chinese currency is "getting closer to an equilibrium price," said Kenneth Lieberthal, director of the John L. Thornton China Center at the Brookings Institution in Washington. "The U.S. Treasury recognizes that, although politically you would not be able to say it officially. So they say that the Chinese need to go further. They do need to go a little further."

Before China’s Transition, a Wave of Nationalism Posted: 26 May 2012 08:21 AM PDT Source: New York Times By Andrew Jacobs BEIJING — As an English-speaking talk show host on China Central Television, Yang Rui likes to think of himself as a bridge between East and West. He has a soft spot for tweed newsboy caps and Sherlock Holmes-style pipes and takes pride in his communications degree from Cardiff University in Wales. He may exult in China's growing might, but made sure his son attended college in the United States. His program on the state-run CCTV, "Dialogue," often includes both foreign and Chinese guests. "I have to remind myself that I'm not representing myself," he once remarked. "I'm representing the image of a country." But this week Mr. Yang revealed another side of his persona in a torrent of microblog messages that derided some foreigners as "trash" and accused Western men of seducing local women in an effort to spy on China. "The Ministry of Public Security must clean out foreign trash, arrest foreign thugs and protect innocent girls," he wrote to his 820,000 followers. "Behead the snakeheads, the unemployed Americans and Europeans who come to China to make money, traffic in people and mislead the public by encouraging them to emigrate." Mr. Yang's comments aggravated what many residents from abroad say is an increasingly palpable rush of antiforeign hostility that often quietly coexists, paradoxically, alongside effusive admiration for the West. Two ugly situations involving foreigners have helped stoke the antipathy. In one, a Russian-born cellist with the Beijing Symphony Orchestra was captured on video using boorish language to attack a fellow train passenger who objected to him putting his bare feet on her seat. Despite a videotaped apology, he was fired this past week. The more serious case involved a drunken British tourist apparently sexually assaulting a Chinese woman on a Beijing street. The video, also posted on the Internet, showed a group of passers-by pummeling the man into unconsciousness. In the days that followed, the police in Beijing announced a 100-day campaign to rid the country of foreigners who are living or working in China illegally. The initiative, promoted through banners and articles in the state news media, encourages citizens to report those suspected of violating the law to the authorities. Whether coincidental or not, the campaign dovetails with a fusillade of attacks in the state news media. Xinhua, the state-run news agency, ran an editorial at the top of its home page last week that accused other governments of using reporters from their countries to "tactically control" China's image in the overseas news media. On Friday, People's Daily, the ruling Communist Party mouthpiece and a political weather vane, described Western efforts to export democracy and human rights to China as a new form of colonialism. "They are evil acts that would harm society," the article said. Analysts suggest the rising nationalist sentiment may be related to a spate of events that have unnerved the Chinese leadership, including territorial disputes in the South China Sea, a sharply slowing domestic economy and the political turmoil prompted by the downfall of the populist up-and-comer Bo Xilai. Mr. Bo, accused of corruption and violating party discipline, is in detention and awaiting his fate, as is his wife, Gu Kailai, who is implicated in the death of a British businessman. The backdrop for these uncertainties is the once-a-decade change in leadership scheduled for later this year. While the party has in the past stirred the nationalist caldron during times of uncertainty, some analysts said they thought that following that script today could prove harmful to China when it is trying to burnish its soft power. "It doesn't help the party's image to be retaliating against foreigners during the leadership transition," said Bo Zhiyue, a Chinese political analyst at the East Asian Institute of the National University of Singapore. "I find the whole campaign puzzling." The upshot has been a host of inconveniences for those with foreign passports. In recent weeks, scores of scholars and tourists have had their visa applications rejected by Chinese embassies around the world. In Beijing, foreign journalists are on tenterhooks, wondering whether the expulsion this month of an American correspondent for Al Jazeera is a taste of things to come. (Mr. Yang, the CCTV host, for one, has called for a crackdown on journalists who "demonize" China. He also cheered the departure of the Jazeera reporter, Melissa Chan, with a word that could be charitably translated as "shrew." Mr. Yang did not respond to requests for comment.) On Friday night, a phalanx of three dozen officers made the rounds of Sanlitun, a neighborhood popular with foreigners. After checking passports at a Mexican restaurant, the officers could be seen leading away an African patron. Western culture has also taken something of a hit. A joint Chinese-American jazz training program scheduled for June was canceled over "visa issues." Last weekend, the police cited a missing permit when they forced the sudden cancellation of the musical "Oklahoma!" — which was largely cast with non-Chinese and partly financed by the United States Embassy. Desperate organizers found a new location but at substantial cost. The Philadelphia Orchestra, which performs next week at the National Center for Performing Arts in Beijing, has been dismayed to find many of its Chinese corporate sponsors inexplicably backing out at the last minute. "We're used to periodic crackdowns, but the atmosphere for foreigners seems to be more hysterical than in the past," said Jeremiah Jenne, an American researcher and history professor in Beijing who maintains the blog Granite Studio. "This time feels different, because people are being encouraged to dial in and report their neighbors." In addition to the consternation and hand-wringing, foreign residents have expressed bewilderment over the rapid shift in public sentiment. It is a seesawing of emotion that can veer from the worshipful to the venomously resentful. Those conflicting impulses have deep roots. When the British statesman Earl Macartney arrived in China in the late 18th century seeking trading concessions, he was politely rebuffed by the Qianlong emperor, who thought China was sufficiently wealthy and cultured. In the century that followed, as coastal China was carved up by foreign powers, educated Chinese began wondering whether their civilization might be inherently inferior to that of the West. In the first half of the 20th century, the tensions between those advocating Chinese self-reliance and those seeking modernization through opening up to the West were a frequent source of strife. Mao Zedong and his Communist Revolution sought to put an end to any lingering self-doubt by banishing most foreign residents — and Western notions of human rights and electoral democracy. The next three decades, which brought famine, political upheaval and economic stagnation, turned out to be disastrous for liberal thinkers. Hong Huang, an entrepreneur who was one of the few Chinese to study in the United States during the peak of xenophobia in the 1970s, says many Chinese were confused by the sudden change in official attitude that followed the end of the Cultural Revolution in 1976. Once branded as enemies of the people, foreigners were placed on a pedestal in the 1980s, when Beijing was eager to court Western expertise and capital. In those days, she recalled, foreigners used special currency to shop at well-stocked Friendship Stores and stayed in hotels that were off limits to Chinese. "The government made people feel like second-class citizens in their own country and inadvertently created these feelings of massive insecurity," said Ms. Hong, whose mother taught English to Mao and whose stepfather was foreign minister. "When you have this kind of insecurity, it doesn't take much for people to turn uncontrollably emotional." More recently, many Chinese have come to feel maligned by the West despite the marked contrast between the robust growth in China, even if at a slower pace, and the economic frailties of Europe and the United States. But apart from the enviable achievements, there is a simmering sense among educated Chinese that something is missing. The self-doubts are fed by corruption, censorship and the widening gap between the haves and have-nots. Even with their weakened economies, Western countries — with their rule of law and sense of security — still have an enduring appeal when contrasted to the vagaries of authoritarian rule. Dai Qing, a dissident writer who often criticizes the Communist Party, said those long-buried frustrations were awakened when ordinary Chinese saw official favoritism toward foreigners, but felt their own government was unresponsive. "If a Japanese tourist has his bicycle stolen, an entire city department will work around the clock to retrieve it," she said. "They would never do that for a Chinese person."

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