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China's GDP growth dipped to 9 percent in the past three months, the slowest rate in five years. The economy has been dragged down by a slump in the real estate market, weak exports, and a softening of consumer spending, in addition to increased pressures from the global financial crisis.

President Hu Jintao and U.S. President George W. Bush spoke over the phone Wednesday about the ongoing crisis. Hu seems to be growing more concerned about the condition of the U.S. financial system. Some analysts believed that resiliency in the Chinese economy could head off a worldwide recession, but slowing domestic demand will make China more vulnerable to decreases in investment from abroad.

The government has taken such measures as waiving fees on real estate transactions and offering export rebates to bolster the economy. The recent slowdown, however, has not necessarily been unwlecome. China's economic planners have spent years enacting measures to prevent the economy from overheating. The question is: Is economic growth now down to a sustainable level, or were these moves too heavy-handed?

General News

Pro-Taiwan activists assaulted an envoy from the mainland on Tuesday in southern Taiwan.

President Hu Jintao met with the Vietnamese prime minister in Beijing Wednesday. They pledged more high-level contacts between the two countries.

Officials are taking measures to ease a drought in Hunan Province that has led to shortage of water for 78,000 rural people.

Politics

Former Beijing Vice Mayor Liu Zhihua received a suspended death sentence this week for taking 6.97 million RMB (US$1.02 million) in bribes while in office.

Taiwan President Ma Ying-jeou vowed no war will break out with the mainland while he is in office.

Business & Economy

PetroChina announced it may acquire overseas oil companies that have been hurt by the global financial crisis to meet growing domestic demand.

Microsoft Windows users got an unwelcome surprise with their latest software updates. In an effort to crack down on pirated copies of Windows in China, the new patch from Microsoft turns users' screens black and admonishes them for using pirated software.

Science & Environment

Beijing's government plans to award companies up to 2.3 million RMB (US$336,500) for cutting high-pollution production.

In an interview with Science, Chinese Premier Wen Jiabao commented that future economic growth in China is to be accompanied by a 4 percent annual decrese in energy consumption.

China Moment

Too many people, not enough beds? German photographer Bernd Hagemann has a collection of photos showing Chinese people taking naps on any surface, in all manner of contorted poses.

Chung Sung-Jun/Getty Images

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A $6.5 billion U.S. arms deal with Taiwan has soured relations between the U.S. and China. In reaction to the deal, which includes the sale of Apache helicopters, Patriot missiles, and F-16 fighter jet parts to Taiwan, China has canceled several high-level visits and military exchanges.

A spokesman for the Chinese Ministry of National Defense called the actions "reckless" and accused the United States of ruining years of Chinese efforts to build mutual trust on military matters. China views U.S. support of Taiwan as meddling in its domestic affairs.

As this AP report points out, though, the deal marks a certain return to normalcy for the U.S.-China-Taiwan military balance. Sales of defensive arms to Taiwan is longstanding U.S. policy. The Bush administration's eagerness to do the deal had been diminished in recent years by the provocative, pro-indepedence stance of former Taiwan President Chen Shui-Bian. But the election of Kuomintang leader Ma Ying-Jeo, who favors greater cooperation with the mainland, has eased tensions.

On the United States' part, this paradoxical game of distancing itself when cross-strait tensions rise and providing military support when cross-strait relations are good recalls the Cold War era. But as Taiwan's economic dependence on the mainland grows, China has probably realized that the most effective reunification strategy will be economic, not military. U.S. leaders may need to reassess their approach accordingly.

General News

A 6.6-magnitude earthquake hit Tibet Monday. At least 10 people are confirmed dead and 191 homes destroyed. Seven hundred rescuers are on the scene.

The central government granted emergency subsidies to dairy farmers last week, who are suffering from a plunge in demand for their products. More arrests have been made in the tainted-milk scandal and regulators have revised the amount of the industrial chemical melamine that is permissible in dairy products.

Chinese citizens celebrated National Day on October 1, marking the 59th anniversary of the founding of the People's Republic of China. The week-long celebrations are a chance to spend time with family, especially for the millions of laborers who work far from home. Many who missed the Olympics also took the chance to visit Beijing.

Politics

Japan's new Prime Minister, Taro Aso, plans to meet with Chinese leaders later this month.

The Chinese Foreign Ministry voiced opposition to the prospect of imprisoned human rights activist Hu Jia receiving the Nobel Peace Prize, to be announced Friday.

Pro-Beijing politician Jasper Tsang Yok-sing has been elected president of the fourth term Legislative Council of the Hong Kong Special Administrative Region.

Economy

The People's Bank of China cut interest rates along with other central banks Wednesday to loosen up lending markets and stimulate economic activity.

Chinese financial firms are snapping up ex-Wall Street professionals.

Science & Environment

After 10 days of filling, the water level behind the Three Gorges Dam has reached a target of 156 meters. During this second phase of the project, the dam's flood control, power generation, and navigation functions are to be realized. The project will be completed in 2009.

A new study finds that HIV transmission in China has moved beyond cases related to drug addicts and blood transfusions. Gay men and prostitutes are increasingly at risk.

China Moment

In a sign that traditional values may be eroding, a young Nanjing woman adamantly refused to give up her seat on a bus to an elderly woman, citing her affiliation with an online "never give up your seat group."

KAZUHIRO NOGI/AFP/Getty Images

The athletes on China's gold-winning 2008 women's Olympic gymnastics team were not underage, the International Gymnastics Federation has declared after an investigation. Female gymnasts must at least turn 16 in the year of competition to be eligible, and many people suspected that some of the gymnasts were underage due to inconsistent reporting of their ages. In reference to some of the gymnasts' childish body sizes, Bela Karolyi, who coached Mary Lou Retton and Nadia Comaneci, had gone so far to say that China was competing with "half-people."

Not everyone is in the clear, though. It turns out that two members of China's bronze-winning 2000 Sydney team might have been underage. Dong Fangxiao, who was a technical official at this year's games, got her Beijing credential with documents saying she was born Jan. 23, 1986, which would have made her too young to compete in Sydney, the Associated Press reports. Even her blog says she was born in the Year of the Ox (Feb. 20, 1985, to Feb. 8, 1986). Meanwhile, Sydney gymnast Yang Yun said in a June 2007 interview on China Central Television that she was 14 at the 2000 Games. Last week, she told the Associated Press that she had misspoken.

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China Photos/Getty Images

Photos: China’s Poisoned Milk Scandal

Four children have died and 13,000 have been hospitalized after drinking tainted milk formula. Thousands of tons of milk products have been pulled from shelves after inspections revealed that a wide range of products, including liquid milk, yogurt, and ice cream may contain the industrial chemical melamine. The scandal has forced the resignation of China's top food quality official and the dismissal of a provincial party chief.

Dealers that collect milk from farmers and sell milk to major companies stand accused of using melamine to increase the protein count of watered down milk. Sanlu, the company most implicated in failing to ensure product safety, is said to have received complaints as early as December 2007 but ignored the problem until the recent death of an infant put its products under the microscope.

As more and more countries place import bans on Chinese dairy products, government officials have sent hundreds of inspection teams across the country to shore up the dairy industry and develop an overhaul of safety measures.

For more on this scandal, check out this week's FP's photo essay.

General News

Chinese Premier Wen Jiabao is in New York for several days this week to attend a high-level U.N. meeting on the Millennium Development Goals.

Eyes will turn towards the sky Thursday evening as China's "Taikonauts" blast off in the Shenzhou VII spacecraft. China will attempt its first spacewalk.

Forty-three people were killed and 88 injured in a nightclub fire in Shenzhen. Firefighters suspect that fireworks used onstage were to blame.

Politics

Venezuelan Pres. Hugo Chavez paid a state visit to Beijing Tuesday, signing an accord that lays out several plans for oil cooperation between China and Venezuela.

Shanxi Gov. Meng Xuenong resigned on Sunday over his handling of last week's mudslide that killed over 250 people. Incidentally, he was also the mayor of Beijing during the 2003 SARS outbreak and was dismissed for mismanaging that crisis.

Economy

Fears of an economic slowdown have prompted Chinese officials to cut interest rates. Weakness on exports and sagging real estate prices are top culprits.

Chinese banks and financial entities, flush with cash, are cautiously eyeing expansion opportunities as the United States's financial woes continue.

Environment

The Beijing Olympic and Paralympic games are history, but so are the driving bans. Gridlock returned to Beijing's streets this week, causing frustration among commuters and prompting more debate on possible ways to alleviate the traffic problem.

A once-endangered species of monkey that is steeped in local myth is found to be thriving in Guangxi.

China Moment

People would gladly pay a premium on safe milk these days, so why not pay that premium to a wet nurse? One Wenzhou company is offering a wet nurse service that pays its top employees 18,000 RMB a month.

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Feng Li/Getty Images

The Beijing Olympics roused spectators around the world this summer -- if not with athletic spectacles, then certainly with a few controversial highlights.

But the Paralympics and their inspiring opening ceremonies on Saturday may have outdone anything else that has taken place in China's new arenas. The emotion of the night peaked when the final torch bearer, Hou Bin, a wheelchair-bound competitor in the high jump, pulled himself (and his wheel chair) up a rope to the top level of the stadium.

Thanks in part to these games, Beijing now boasts more wheelchair-accessible facilities than ever before. Until recently, China's disabled lived under a stigma left over from the days of Mao, when the word "disabled" was synonymous with "useless." For the disabled community in China, the 2008 Paralympics, which will run through Sept. 17, have delivered a new sense of pride.

General News

The first orphan of the remaining 88 children left without homes from the May 12 earthquake was adopted. The official death toll from the earthquake is holding fast at 69,116.

Meanwhile, the death toll from Monday's mudslide that struck a mine warehouse in Shanxi province has climbed to 128.

The first Chinese tour group to head to Israel to visit Jerusalem and the Dead Sea will depart later this month, Israel's tourism minister announced. 

Politics

Hong Kong's pro-democracy opposition maintained control in elections on Sept. 7, holding onto their veto power over possible reforms to the territory's constitution by securing 24 of the city legislature's 30 electable seats.

Representatives from China, Japan, and South Korea's nuclear regulatory bodies gathered in Tokyo to discuss ways to share information on nuclear safety.

Economy

Data released by the National Bureau of Statistics Wednesday showed a surplus in August trade, while inflation dropped for a fourth straight month.

Sichuan province has received only $180 billion of the estimated $240 billion still needed to repair and rebuild damage left by the May earthquake, according to the province's vice governor.

Chinese troops were deployed to Hunan province to quell protesters demonstrating in front of government buildings. Those gathered were victims of illegal investment schemes run by legitimate real estate and mining companies.

Environment

The two satellites launched to monitor China's environment in an effort to provide more efficient forecasting have begun to send back data.

Beijing city officials apologized to about 30 dozen environmental protestors who demonstrated against the Gaoantun landfill in August.

China Moment

In an attempt to curb nearsightedness and other eye problems so common among young people, a daily curriculum detailing restrictions on font size, teachers' handwriting, and the amount of homework assigned will be implemented in Beijing schools.

NICOLAS ASFOURI/AFP/Getty Images

Theirs sounds like a candidate for The World's Toughest Jobs. Protestors in Bangkok have, for the last 11 days, filled the street outside the office of Thai Prime Minister Samak Sundaravej, preventing him from entering his work space and demanding his resignation. They are members of the opposition group, People's Alliance for Democracy (PAD). The prime minister has called a state of emergency, and an army presence is visible in the streets.

I should have known better -- these are not your typical protestors. Turns out, the discontents are better fed than many of the rural Thais who support the prime minister. Free food -- even massages -- is the street fare these days. The protestors use electricity from the government house's electrical system to power the broadcast of fiery anti-government speeches. With all there is to see and do, it's no wonder they won't go home.

The mood in the capital says more about this crisis than just how organized (and well stocked) the demonstrations have been. The PAD grew from a movement of mostly urban elites, believing that democracy -- which gives much political power to the country's rural voters -- is not a good idea. They lament the corruption of coup-ousted Prime Minister Thaksin Shinawatra and worry that Samak is more of the same. Instead of a popularly elected legistlature for example, the PAD prefers that the seats are appointed from above.

Is is a culture clash of the highest degree? With the elites out on the streets, the masses say they are suffering as tourism and other industries wait for the crisis to end. Neither the prime minister nor the protestors look ready to bring the stalemate to a close.

Rest assured, no one on the street will go hungry waiting.

Top Story

JEWEL SAMAD/AFP/Getty Images

China passed the Olympic torch to Britain Sunday, bringing an end to a controversial Olympics marked both by spectacle and suppression. On the sporting field, China achieved its goal of winning the gold medal count. The United States, however, dubbed the games a "missed opportunity" for progress on human rights, and expressed disappointment that the Olympics didn't bring more "openness and tolerance" to China. In the face of diplomatic pressure, Chinese authorities freed eight Americans who had been detained for pro-Tibet demonstrations during the games. 

China now faces uncertainty over its economic future, hoping to avoid the infamous Olympic hangover. 

Politics

President Hu Jintao visited South Korea Monday, agreeing to expand ties between the two countries. 

Authorities blocked, then reinstated, access to iTunes because of an album titled Songs for Tibet.

The Dalai Lama alleged that repression worsened in Tibet during the Olympics. The spiritual leader canceled trips to Mexico and the Dominican Republic because of exhaustion.

Economy

Facing increasing costs, manufacturers are beginning to look outside China.

China overtook the United States as Japan's largest export market. 

Chinese companies are exploring ventures for oil in Iraq and copper in Afghanistan. 

The Bank of China is fighting allegations of supporting terrorism.

Environment

Air quality in Beijing is the best in 10 years, and a top environmental official expects the blue skies to continue.

The Olympics diverted water from thousands of farmers, causing a man-made drought that cost locals in Hebei province their homes and land. 

Taiwan

Prosecutors ordered the son and daughter-in-law of Taiwan's former president, Chen Shui-bian, not to leave the island. The former president, his wife, son, daughter-in-law and brother-in-law are all facing investigation for alleged money laundering. 

General News

Explosions at a chemical plant in Guangxi province killed 20 Wednesday. 

Tropical Storm Nuri showered Shanghai with its heaviest rains in 100 years.

Junko Kimura/Getty Images

People walk past a half-body statue in Shibuya, Tokyo's main shopping area, on August 22. Online Game Company NHN Japan has set up a series of these statues to promote the mobile game site hange.jp. When people touch the statue's arm with their mobile phone, the application site will automatically open and a lucky winner will be rewarded 10,000 U.S. Dollars.

Top Story

FENG LI/Getty Images

Remember how China promised to play nice and at least let protestors demonstrate in three specially approved parks? Authorities revealed that 149 people had submitted 77 applications to demonstrate during the Olympics. None were approved.

Chinese officials blamed the matter on technicalities ("The applicants have been told to apply again according to the proper procedures set down," a spokesperson said. "It does not mean their applications have been rejected.") Yet two elderly women who applied to protest were ordered to a year of reeducation through labor. One Hong Kong resident received word that he could protest once the Olympics were over.

Five Americans were arrested Tuesday after spelling out "Free Tibet" with LED lights in Olympic Park. Three others were detained in a seperate incident. On Friday, five Americans were detained then deported after hanging a 375-foot "Free Tibet" sign on the side of the state-run television headquarters.

More Olympics

As of Wednesday afternoon, China led the gold medal count with 45, but trailed the United States overall, 79 to 82. Chinese women have been key to their country's Olympic success.

Officials confirmed what FP readers already knew: the Beijing games are the most-viewed in Olympic history.

State media scrambled to massage the surprising withdrawal of superstar hurdler Liu Xiang. Liu, perhaps the most popular athlete in China, pulled out of the 100-meter hurdles after he said his foot "didn't feel right."

Environment

Environmental officials say pollution levels have met expected standards during the Olympics. Independent observers agreeed, but said the success was largely due to favorable weather.

U.S. consumers may feel the fallout of Beijing's efforts to curb smog, which made manufacturing more expensive.

Economy

The Olympics haven't been a boon for China's stock market, which has tumbled 15 percent since Aug. 8.

Business is good, however, for Tsingtao beer.

U.S. Treasury Secretary Henry Paulson said China is moving in the "right direction" on currency reform.

Rebuilding costs from May's Sichuan earthquake may total $147 billion.

Politics

Hua Gofing, who briefly ruled as Mao's successor, is dead at 87.

Things aren't looking good for ethnic unity.

Taiwan

Former president Chen Shui-bian, under investigation for money-laundering allegations, has been barred from leaving the island.

The Taipei zoo will receive two pandas as a gift from the mainland. The names of the two pandas, Tuan Tuan and Yuan Yuan, mean "unity" when put together.

China Moment

Chinese media speculate that Michael Phelps is actually Korean.

Remember way back when people were asking whether we should "politicize" the Olympics? Isn't it just supposed to be about sports and itty bitty gymnasts doing their best? I have to say, in China, that question is bizarre. The Olympics is politics: that is the point.

Take the case of Owen, a torch-bearer living in the youth camp of the Olympic village. He is not a star athlete, but he's certainly well-spoken and smart as a whip. When you ask him what it was like to run those 30 meters he ran with the torch, he begins his story this way:

There is a garden next to the youth camp. In 1860, warriors broke into it and killed everybody. And that was the start of a terrible part of Chinese history, but now, within 140 years, I, as a representative of the youth, stand on the same ground and hold the torch showing that China is ready to be one of the strongest countries in the world. It's completely new and it's completely meaningful. And all of this is seen by the grass and by the land, by the earth, so I kissed it."

After telling us more about the Olympic compound, which is a heavily fortified, expansive prep school surrounded by green walls with the slogan "the youth are the future" scribbled across them, Owen went on. (By the way, at the Olympic youth camp, the youth are provided with soccer fields, basketball courts, swimming pools, a variety of stores and post offices. It is not dissimilar to Oberlin, Ohio, where I went to college, except you can't get in and out of the Village without a pass or the Olympic torch.)

We have dreamed about having the Olympic games for about 100 years. And we've tried so many times, but we failed so many times. If you give the holding rights to a city, it means you have to say that the city is good. We want to hear that you are respecting our behavior, our hard work. Whenever you hold the Olympic games it is a chance for a country or for a city to improve. And that will eventually benefit each and every Chinese.

Years later, when you look at history, you will see, we have made great progress. After we've had so hard time, we've survived. All of the Chinese are strong. We can never be defeated! You can kill us with your gun. But we will never be defeated. We survive. That's what the Olympics can tell the world."

Olympics 2008: It's not just sports; it's not just politics. What it's about is China.

Editor's note: Zoe Chace is an independent public radio producer who is in China for the Olympics. She'll be filing periodic dispatches for Passport about what it's like to be in the middle of the world's biggest spectacle, the 2008 Olympic Games. Got any questions or thoughts on what she should report on? Post your thoughts in the comments below.

Previous posts:

• Olympic Diary, Day 5: Hating the Olympics
• Olympic Diary, Day 2: China's lonely chairman
• Olympic Diary, Day 1: Where is everyone?

Picking up on Katie's post: What happens when you give in to a massive lobbying effort, somehow believe bogus promises of improvement, wallow in corruption, and ultimately give the Olympics to a country that never deserved them? Just ask the International Olympic Committee:

IOC spokeswoman Giselle Davies said journalists should not be prevented from doing their jobs, a day after John Ray of London-based ITV News said he was wrestled to the ground and briefly held by police who apparently mistook him for a protester.

Asked repeatedly if IOC officials are embarrassed that China was not living up to its promises, Davies would only say they are happy with the way China is running the sporting events."

And, of course, the opening ceremony was lovely.

JUNG YEON-JE/AFP/Getty Images

Although relations have warmed somewhat between the two Koreas in recent years, that trend appears to be retreating -- rapidly.

Last month, a North Korean soldier shot an unarmed South Korean tourist while she was visiting Mt. Kumgang, a tourist area in the North operated by a South Korean company (shown at right). In response, South Korea suspended future tours to Mt. Kumgang and ordered all South Korean residents to leave the resort.

Now, the North Koreans have returned the favor, changing the wording on their official invitation to South Korean tourists. Chosun Ilbo's editorial board has more:

The words 'We invite' and 'guarantee the safety' of the visitor has been changed to 'agree' (to the visit) and 'offer accommodation.'... Without a formal safety guarantee, whether it is for Mt. Kumgang or Pyongyang, it has become dangerous for South Koreans to set foot on North Korean soil simply hoping that nothing will go wrong."

I guess it is now, if not impossible to travel to Mt. Kumgang, at least highly inadvisable.

NOGI KAZUHIRO/AFP/Getty Images

Bela Karolyi, the NBC sports analyst who was coach of some of the world's greatest gymnasts, including Mary Lou Retton and Nadia Comaneci, is incensed. He is convinced that China has included underage girls -- the age requirement is 16 -- on its women's gymnastics team by forging the girls' birth dates on official documents.

Yesterday, in reference to the Chinese gymnasts' childish body sizes (the team average is 4 feet, 9 inches, and 77 pounds), he unleased some verbal venom to the Associated Press:

They are using half-people. One of the biggest frustrations is, what arrogance. These people think we are stupid.

Gymnastics is famous for its small women -- or rather, girls -- but the Chinese gymnasts look awfully tiny and juvenile. In comparison, Japan's team average is 4 feet, 10 inches, and 83 pounds, while the Americans are an average of 5 feet and 107 pounds. Granted, size isn't always an indicator of age, but the New York Times recently pointed to other evidence of age falsification -- inconsistent reporting of some gymnasts' ages in official documents, media reports, and government Web sites.

The Chinese gymnasts certainly aren't half-people, but it sounds like the Chinese government might be telling some half-truths.

China Vitae

Many of us in the media have spilled a lot of ink about the Beijing Olympics, and a great deal of it has been critical. But what is the Chinese view?

I spoke Thursday morning with Amb. Wu Jianmin, a longtime Chinese diplomat who served as China's ambassador to the United Nations until 1998. Since 2003, he has been president of China Foreign Affairs University, where his mission is training the next generation of Chinese diplomats. Check it out.