China’s self-image shifts from outsider to insider status.

By MICHAEL WINES


BEIJING - So far, the World Trade Organization has rebuffed China in an important case involving Chinese restrictions on imported books and movies. The Chinese government dropped explosive espionage charges against executives of a foreign mining giant, the Anglo-Australian Rio Tinto, after a global corporate outcry. And the government recently said it had backed off another contentious plan to install censorship software on all new computers sold here.

Throughout its long economic boom, China has usually managed to separate its aggressive push into the global business arena from domestic politics, which remained tightly controlled by the Communist Party. But recent events raise the question of just how long it will be before the two meet.

In each of those matters, politics and business collided, and business won. Business does not always win, and when it does, as in these cases, the reasons are as often as not a matter of guesswork. But in at least some highprofile matters, China appears to be facing the reality that the outside business world can be freewheeling and defiant when its profits are threatened. And so China’s authoritarian system may also have to evolve in ways its top leaders may not readily endorse.

Beijing has a global footprint now, a consequence of its booming domestic growth and breakneck international expansion. And decisions that once were made on purely parochial grounds - like censoring Web sites, protecting the interests of its stateowned companies and restricting the flow of foreign news and entertainment into China - now have international ramifications.

“This is a country in the middle of a big transition in its global role,” said Kenneth Lieberthal, a veteran China analyst now at the Brookings Institution, a nonprofit public policy organization based in Washington, DC. “They’ve always looked in the past to what’s good for China, and they still do. But for the first time, added to that is the consideration that they’re in the position of being rule-makers, not just rule-takers.”

China’s leaders, he said, “are just beginning to learn how to handle that.”

Recently, Chinese prosecutors appeared to retreat from earlier statements that they would prosecute employees of Rio Tinto as spies for stealing state secrets.

While the espionage allegations were not spelled out, they were apparently related to delicate commercial negotiations over the price of China’s imports of iron ore for its steel mills.

Rio Tinto executives have strongly denied the accusations, and both the United States and Australia said China’s actions could have both business and diplomatic repercussions.

While the Rio Tinto employees still face lesser charges of bribery and theft of trade secrets, The espionage threats stirred broad unease among foreign companies operating in China, which feared that they could face persecution and closed-door trials for engaging in what much of the world would regard as bare-knuckle business tactics.

Yet whether such instances represent trends or exceptions - or neither - remains a matter of some debate.

Increasingly, many experts say, Chinese officials appear to be aware that their actions have far broader ramifications than they might have had even a few years ago.

“Fifteen years ago, the mantra in China was, ‘We’re the victims of a system that’s stacked against us,’” said James V. Feinerman, an expert on Chinese law and policy at Georgetown University in Washington.

China’s entry into the world trading system, he said, is slowly helping to change the nation’s view of itself from that of an outsider to an insider with a stake in the global system’s success.

Other experts note, however, that what outsiders see as carefully calculated policy changes may in fact be nothing of the sort.

The government’s decision to install censorship software on computers - and its subsequent reversal - is but one example, they say; the original proposal was probably pushed by a government clique that found itself outflanked once Internet users and foreign corporations began objecting to the plan.

“Is China susceptible to international pressure? Of course it is,” said Charles Freeman, a leading China scholar at the Center for Strategic and International Studies in Washington.

“China does have international interests, and they are impacted by what it does domestically,” he said. “There’s a constant battle between agencies over how much political capital to expend on international issues against domestic interests.”