Byline: By danny hakim section: Section B; Column 0; Metropolitan Desk; Pg. 1 Length

URL: http://www.nytimes.com
SUBJECT: WEALTHY PEOPLE (91%); PRIVATIZATION (89%); US PRESIDENTS (69%); BRIBERY (63%); IRON & STEEL MILLS (62%); SETTLEMENT & COMPROMISE (61%); CREDIT CRISIS (67%)
PERSON: PAUL MCCARTNEY (58%); GEORGE SOROS (56%); BILL CLINTON (56%); ROMAN ABRAMOVICH (50%)
GEOGRAPHIC: KIEV, UKRAINE (94%) UKRAINE (98%); RUSSIA (93%); INDIA (79%)
CATEGORY: Business and Finance
Victor Pinchuk
LOAD-DATE: August 8, 2008
LANGUAGE: ENGLISH
CORRECTION-DATE: August 11, 2008

CORRECTION: An article on Friday about Victor Pinchuk, a wealthy Ukrainian who has become an international mover and shaker, referred incompletely to a lawsuit brought against him by a rival Ukrainian businessman. While the suit, which was settled in 2006, did indeed accuse Mr. Pinchuk of siphoning off $41 million in profits from an iron alloy producer he had purchased, it also included other allegations of wrongful diversion estimated at more than $500 million; the alleged diversions did not total only $41 million.
GRAPHIC: PHOTOS: Victor Pinchuk has a fortune of $5 billion to $10 billion.(PHOTOGRAPH BY JAMES HILL FOR THE NEW YORK TIMES)

To build his reputation, Mr. Pinchuk paid more than $5 million to have Paul McCartney perform at a concert in Kiev in June.(PHOTOGRAPH BY JAMES HILL FOR THE NEW YORK TIMES)(pg. C10)

DOCUMENT-TYPE: Biography; Biography
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

505 of 1231 DOCUMENTS

The New York Times
August 8, 2008 Friday

Late Edition - Final

Eccentricity Fuels a Revival of Vermont's River Towns
BYLINE: By PAM BELLUCK
SECTION: Section A; Column 0; National Desk; GOING DOWN THE ROAD; Pg. 11
LENGTH: 1391 words
DATELINE: BELLOWS FALLS, Vt.
Few people would describe Stephen McAllister as conventional.

After all, he once jumped out the window of his 11th-grade English class during a discussion of ''Don Quixote'' that he considered ''particularly boring,'' getting himself expelled from school in the process.

Now, Mr. McAllister has a plan that may seem as quixotic. At age 59, he has returned to this gritty river village, buying an abandoned paper mill on the Internet that he is turning into an eco-resort, a go-to place for ''green marriages, green bar mitzvahs and carbon-neutral vacations.''

It is the kind of entrepreneurially eccentric idea that writers of a Depression era federal guide to Vermont found flourishing back then, especially in this southeastern sliver of the state along the Connecticut River, which has long bubbled with a kind of creative chutzpah.

Vermont, the authors suggested, was not just a state, but a state of mind.

''Vermont apologists have defended this attitude as the very essence of liberty,'' they wrote. ''Outside observers have considered it as a consistent manifestation of unenlightened perversity.''

Revisiting some of the river towns nowadays finds them trying to rebound from factory closings, farm consolidations and fading Main Streets by again embracing idiosyncratic ideas, and drawing on the bedrock that once made these towns vibrant: the river, the railroad and a hardy independent streak.

Consider the colorful characters in the 1937 guide, a nationwide writers' project sponsored by the Works Progress Administration that has been republished online and is attracting new public attention.

In Brattleboro, there was Dr. Robert Wesselhoeft, a German political refugee, who established the ''water cure,'' a mineral spring attracting far-flung folks with frayed nerves, reportedly including opposites like Stonewall Jackson and Harriet Beecher Stowe.

In Bellows Falls, Henrietta Howland Robinson Green, an investor then considered the richest woman in America, reportedly did not change her undergarments until they had worn out, rebuffed heat and hot water, and refused to pay for a doctor to treat her son's broken leg, which was eventually amputated. (The site of this miser's home is now a bank.)

And in Putney, John Humphrey Noyes, a ''magnetic, elusive, and provocative'' religious fanatic, wrote in 1847 that '' 'there is no more reason why sexual intercourse should be restrained by law, than why eating and drinking should be' '' and ''led his followers from communism of property, through communism of households, to communism of love, or, as he called it, complex marriage,'' the guide said.

''There has always been real creativity and real eccentricity and independent thought,'' said Dona Brown, an associate professor of history at the University of Vermont. ''People who had a big idea and went with it,'' often exhibiting ''a tinkering or artisanal quality.''

''They had this idea that they could fix things, even fix humanity,'' Professor Brown said.

That spirit seemed to come in bursts, usually after economic hard times. The early 1900s spawned manufacturing masterminds; the 1960s, following a postwar slump, drew back-to-the-land hippies.

Now, that cycle is recurring. In Brattleboro, when people ''saw the regular businesses not being viable, they really wanted to make sure Brattleboro didn't suffer,'' said Elsie Smith, 37, who, with her twin sister and trapeze partner, Serenity Smith Forchion, started the New England Center for Circus Arts in a defunct cotton mill, where arts-related businesses were offered low rents.

The mill's strong beams allow circus folks to ''hang off them without worrying too much about bringing the ceiling down,'' Ms. Smith said. More importantly, here, ''you're not odd or weird or strange for being a circus performer.''

In Bellows Falls, ''by the mid-1990s, 75 percent of the stores were vacant,'' said Robert McBride, a painter who has helped convert derelict buildings into housing and studios for artists, igniting an economic resurgence. ''People were saying we needed to get a mill back, bring back in a big company. Wasn't going to happen. So we brought artists to the table.''

Among them is Denny Partridge, who returned here after decades in New York to perform plays in bakeries and other offbeat venues during the ''mud season'' of late winter and early spring. ''I've always had a theory that art exists best in places where life is hard,'' she said.

A group from Brooklyn, ''So Percussion,'' has been commissioned to write and perform music on a Bellows Falls boxcar and in Brattleboro's train station. Their ''instruments'' -- oil drums, paper spools, pipes, bicycle wheels -- echo the town's industrial past.

Professor Brown said the 1937 guide, influenced and partly written by Dorothy Canfield Fisher, ''spends a lot of time highlighting odd historical aspects'' of Vermont, as if to say ''even if the milk check is cut in half and factories are shut, these are your roots, this is your heritage, these are your resources you can draw on.''

Some landmarks noted in the guide are making a comeback.

Take Naulakha, the house in Dummerston, where Rudyard Kipling wrote ''Captains Courageous'' and ''The Jungle Book,'' and where he apparently introduced skiing to Vermont using skis from Sir Arthur Conan Doyle. Kipling left in 1896 after a public spat with his ne'er-do-well brother-in-law, and for decades the house went unused. Now, vacationers can sleep in Kipling's bed, flush his toilet tank, scribble at his writing desk.

A factory started in 1846 by Jacob Estey, who ran away from an orphanage and became the world's largest maker of reed organs, closed in 1960, but it, too, is being revived.

In its heyday, ''thousands of American women sewed till the small hours, picked berries under a blazing sun or rented the spare room, and saved their egg money in a cracked teapot on the top shelf with just one goal in mind: a black walnut Estey organ in the parlor,'' the guide rhapsodized.

Now, Estey reed and pipe organs from around the world have been reclaimed by the fledgling Estey Organ Museum in Brattleboro. Ned Phoenix, an organ restorer, refurbishes them, sometimes holding ''organ bees,'' like quilting bees, inviting the community to help fix up the instruments. The museum is also restoring a pipe organ that visitors will be able to walk through.

Easy to reach from urban centers like New York but unspoiled enough to feel remote, these towns beckoned unconventional types. Unlike other parts of New England, where ''people from away'' never really become equals, newcomers here are woven into the fabric -- like the '60s back-to-the-landers who set up communes, learned farming from books and weathered winters so harsh no mail was delivered.

''You had your problem-solving skills, your cussedness, and your neighbors, and a kind of wonderful, chastening place to be,'' said Verandah Porche, 62, a poet (nee Linda Jacobs, originally from New Jersey), who still lives at Total Loss Farm in Guilford, now a multigenerational homestead.

These days, a back-to-the-river movement hopes to reinvigorate the region with boating, fishing and other activities, said David L. Deen, a Democratic state representative who was out rowing recently. For decades, the river was ''a sewer, and the smoke from the mills filled it up,'' said Artie Aiken, 95, ofWestminster, who worked the railroad, drove ''four horses on a tater digger'' and risked his life saving a farmer's cows in a 1936 flood.

Still, the ambition of Mr. McAllister's eco-resort, Liberty Mill, has surprised locals in this struggling town, whose lodging choices now include the Hetty Green motel -- not exactly the green Mr. McAllister has in mind. ''Avoid at all costs,'' said one traveler in a review of the motel on Trip Advisor. Liberty Mills plans to offer an Olympic-quality kayak race course, a skate park and a pool where a coal furnace once fumed; photovoltaic, wood pellet and geothermal power; and compost toilets for guests that will fertilize a farm growing food for the resort.

''When I first heard about it, I was flabbergasted that anyone could think they could pull that off,'' said Jim Mullen, the town manager of Rockingham, which includes Bellows Falls. But, he added, ''the community here always says 'just go for it.' ''

URL: http://www.nytimes.com
SUBJECT: INTERNET & WWW (76%); PAPER & PACKAGING (71%); RESORTS (71%); PAPER MILLS (71%); PLANT CLOSINGS (71%); HISTORY (69%); RELIGION (60%); SCHOOL SUSPENSION & EXPULSION (57%); COLLEGE & UNIVERSITY PROFESSORS (50%); REFUGEES (50%)
GEOGRAPHIC: VERMONT, USA (97%); NEW JERSEY, USA (79%) UNITED STATES (97%); GERMANY (69%)
LOAD-DATE: August 8, 2008
LANGUAGE: ENGLISH
GRAPHIC: PHOTOS: ALONG THE RIVER: Enjoying a river near Bellows Falls, Vt. The town and other river towns in the state, featured in a Depression era travel guide, are being reborn.

RELOCATING, TO HOME: Verandah Porche, a 62-year-old poet originally from New Jersey, lives at Total Loss Farm in Guilford, Vt.

IMPROVISING: At the train station in Bellows Falls, Vt., a band makes music with unconventional instruments.

HOME TO MANY: Total Loss Farm, a multigenerational homestead in Guilford, along the Connecticut River.(PHOTOGRAPHS BY TYLER HICKS/THE NEW YORK TIMES)

POLISHING HISTORY: The Estey Organ Company in 1927 in Brattleboro, Vt. Today, the Estey Organ Museum is home to old reed and pipe organs.(PHOTOGRAPH BY CLIFTON ADAMS/NATIONAL GEOGRAPHIC) MAP Map details area of Bellows Falls.
DOCUMENT-TYPE: Series
PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

506 of 1231 DOCUMENTS

The New York Times
August 7, 2008 Thursday

Correction Appended

Late Edition - Final
Niche Farming Offers Way Back to the Land
BYLINE: By BRENT BOWERS
SECTION: Section C; Column 0; Business/Financial Desk; IN THE HUNT; Pg. 3
LENGTH: 1161 words
STARTING a small farm can pay rich dividends, especially if the farm produces niche foods like artisanal cheeses or truffles. But don't quit your day job.

Sarah Beth Aubrey took that advice several years ago, after, she says, she ''got sick of driving to work.'' She succumbed to an entrepreneurial itch by founding Aubrey's Natural Meats, a 31-acre farm in Elwood, Ind., where she and her husband, Cary, raise cattle and pigs.

Ms. Aubrey, 33, who grew up on a farm in Illinois and was crowned the first runner-up National Polled Hereford Queen at the age of 20, earned a bachelor's degree in agricultural communications and then worked at an Indianapolis agribusiness consulting firm and a financial planner.

But the frustration of working for somebody else ''was like water dripping down a cave wall,'' she said, adding: ''You can hear it. Then it's a puddle, and suddenly you're ankle deep in it.''

She started her meat venture in the fall of 2003, with her husband, who also grew up raising cattle, as minority partner. The business is thriving, though it doesn't pay the bills. But Mr. Aubrey has kept his state job as an agricultural specialist, and she has leveraged her farm expertise into consulting work and books, including ''Starting & Running Your Own Small Farm Business.''

Her No. 1 recommendation to people thinking about getting into farming is to ''wean yourself slowly off outside income.'' From that follows No. 2: Create a contingency fund.

Lana Holmes, who played on her extended family's cattle ranches in Texas as a girl and worked on farms in her college years, has also chosen to earn a regular paycheck as she gets her farm up and running.

Ms. Holmes, 54, and her partner Ann Vowels, 51, bought 110 acres on a mountainside in Anderson Valley, about 100 miles north of San Francisco, 10 years ago with the idea of producing something besides grapes, the ''monoculture of the area.''

They first took two years off to build a barn-style home, with a friend's help. Then, in 2005, they decided to try growing truffles.

Traditionally, truffles -- fungi that grow alongside tree roots -- have been collected in the wild with the help of scent-detecting swine or dogs, and command prices as high as $2,700 a pound, although most sell for far less.

In doing her horticultural research, Ms. Vowels found a magazine article about Australians and New Zealanders who were growing the tubers by inoculating the roots of hazelnut and oak trees with their spores. This sort of commercial production is thriving in France, Spain and Croatia, but is just getting started in the United States.

Ms. Vowels was taken with the idea of growing a staple of haute cuisine, Ms. Holmes said, while she herself, a ''money-driven'' pragmatist, ''was excited about the potential returns.''

It will probably be four to six years until the crop matures (if it doesn't fail), Ms. Holmes said. But, she said, both she and Ms. Vowels can afford to be patient.

The founder of three start-ups as well as a consultant and executive coach, Ms. Holmes recently took the post of chief operating officer of OmDirect, a San Francisco-based Web portal for producers and buyers of organic food. Ms. Vowels is a corporate trainer and executive coach.

Though it has been three years since they planted 200 saplings inoculated with the spores of black truffles on a one-acre plot, they understand that it takes time. ''All this is very new,'' Ms. Holmes said. ''But even if it takes us eight years, so what? It's about doing something unique and producing something we love.''

Ms. Aubrey and Ms. Holmes are apparently onto something. In one measure of the growth in smaller farms (though it does not include ''all natural'' operations like Ms. Aubrey's), the number of organic farms in the United States more than doubled from 1992 to 2005, to 8,500 from 3,600, and the land under their cultivation more than quadrupled, to 4.1 million acres from 935,000 acres, according to the Agriculture Department's Economic Research Service.

''Organic farming has become one of the fast-growing segments of U.S. agriculture,'' the service said in a recent report.

Another Research Service study indicated that despite the consolidation of American agriculture, tiny farms were holding their own. The number of farms with annual sales of more than $250,000 in inflation-adjusted dollars nearly doubled to 152,000 in 2002 from 85,000 in 1982, the survey showed.

While midsize and small farms, with revenue ranging from $10,000 to $250,000, declined, operations with sales of less than $10,000 jumped 14 percent over those years, to 2.5 million, from 2.2 million. The reports authors cautioned, though, that technical changes in its methodology exaggerated the increase.

Robert Hoppe, an Agriculture Department researcher, recommended the slow and steady approach being taken by Ms. Aubrey and Ms. Holmes. This could be a good time for entrepreneurs to start a farm, Mr. Hoppe said, ''particularly if they have other sources of income.''

Ms. Aubrey says a convergence of several trends explains the allure of small farms. For starters, she says, the consolidation of the agricultural industry in the 1970s and '80s displaced a lot of people, now in their 30s and 40s, who are being drawn back to the land.

More generally, she says, Americans share a longing for their pastoral past. ''People have gotten so far from their agricultural roots, and now they are rediscovering them,'' she said. ''You can see the emotions on their faces when the talk about their herb gardens and their vegetable gardens and about putting up the hay.''

Moreover, as organic farming, farmers' markets and cooperatives have gained in popularity, and food scares have been the stuff of headlines, many consumers are paying more attention to their food, ''what's in it, where it's produced,'' she said.

For entrepreneurs tempted by the rural life, Ms. Aubrey and Ms. Holmes offer these bits of advice:

Do market research. Go to farmers' markets. See what products are common and which ones are missing. Talk to people. Ask if they would buy your product.

Check out the local labor pool to make sure enough workers are available.

Get the advice of an accountant and a lawyer.

Decide early on whether to go into the wholesale or retail market.

Ask yourself whether you will be able to adapt to the lifestyle, notably long hours of hard toil. If you doubt you will enjoy bending over crops under a hot sun, find another line of work.

Do not make the common mistake of growing too big too fast. You will risk discovering you do not have the cash flow to buy the equipment that you need to meet the orders.

Choose a ''value added'' niche product, like gourmet mushrooms, that is not sold widely in your area.

''Make sure they're unique enough for people to buy them and eat them,'' Ms. Aubrey said. ''If it's unusual and tastes good, people will buy it.''

URL: http://www.nytimes.com
SUBJECT: FARMERS & RANCHERS (90%); BEEF CATTLE FARMING (89%); DAIRY PRODUCTS (78%); WAGES & SALARIES (78%); CONSULTING SERVICES (77%); ENTREPRENEURSHIP (76%); MEATS (76%); FINANCIAL PLANNING (74%); AGRICULTURE (74%); AGRICULTURAL RESEARCH (73%); MAMMALS (89%)
PERSON: MICHAEL MCMAHON (55%)
GEOGRAPHIC: SAN FRANCISCO, CA, USA (79%); INDIANAPOLIS, IN, USA (72%) CALIFORNIA, USA (79%); ILLINOIS, USA (79%); TEXAS, USA (79%); INDIANA, USA (72%) UNITED STATES (79%); NEW ZEALAND (79%); CROATIA (74%); SPAIN (69%); FRANCE (50%)
LOAD-DATE: August 7, 2008
LANGUAGE: ENGLISH
CORRECTION-DATE: August 13, 2008

CORRECTION: The In the Hunt column on Thursday, about entrepreneurial farming, rendered incorrectly the name of the San Francisco Web portal whose chief operating officer, Lana Holmes, has started a truffle farm. It is Om Direct, not OmDirect.
GRAPHIC: PHOTOS: Lana Holmes, left, and Ann Vowels have planted 200 saplings inoculated with the spores of black truffles in Northern California.(PHOTOGRAPH BY HEIDI SCHUMANN FOR THE NEW YORK TIMES)

Sara Beth Aubrey started a business, Aubrey's Natural Meats, with her husband in Elwood, Ind.(PHOTOGRAPH BY AJ MAST FOR THE NEW YORK TIMES)

PUBLICATION-TYPE: Newspaper

Copyright 2008 The New York Times Company

507 of 1231 DOCUMENTS

The New York Times
August 7, 2008 Thursday

Late Edition - Final

From China's Olympic March, Lessons in a Party's Resilience
BYLINE: By JIM YARDLEY; Zhang Jing and Huang Yuanxi contributed research.
SECTION: Section A; Column 0; Foreign Desk; Pg. 1
LENGTH: 2099 words
DATELINE: BEIJING
As Beijing was starting construction on its main Olympic stadiums four years ago, China's vice president and leading political fixer, Zeng Qinghong, warned the 70 million members of the ruling Communist Party that the party itself could use some reconstruction.

Mr. Zeng argued that the ''painful lessons'' from the collapse of other Communist parties in the Soviet Union and Eastern Europe could not be ignored. He said China's cadres needed to ''wake up'' and realize that ''a party's status as a party in power does not necessarily last as long as the party does.''

Mr. Zeng, who is now retired, was alluding to the pressures of economic liberalization, political stagnation and globalization that many analysts have argued would ultimately topple one-party rule in China. The Olympics also posed a pressure point as some analysts wondered whether the expectations and international scrutiny brought by the Games might help crack open another authoritarian political system -- as happened in Seoul in 1988.

But if the Olympics have presented unmistakable challenges and crises, the Communist Party has proved resilient. Public appetite for reform has not waned, but the short-term byproduct of the Olympics has been a surge in Chinese patriotism that bolstered the party against international criticism after its crackdown on Tibetan protesters in March and the controversy over the international Olympic torch relay.

Economic and social change is so rapid in China that the Communist Party is sometimes depicted as an overwhelmed caretaker. But in the seven years since Beijing was awarded the Games, the party has adapted and navigated its way forward, loosening its grip on elements of society even as it crushes or co-opts threats to its hold on political power.

The party has absorbed entrepreneurs, urban professionals and university students into an elite class that is invested in the political status quo, if not necessarily enthralled with it. Private capitalists may be symbols of a changing China. But the party has also clung tenaciously to the most profitable pillar industries and the financial system, and it is not always easy to distinguish the biggest private companies from their state-run counterparts in China's hybrid economy.

Faced with public anger over corruption, Chinese officials are now required to attend annual training sessions in a nationwide, if not always successful, program to raise competency. And if officials have long since abandoned efforts at Maoist-style thought control, the propaganda machine can still stir up nationalist passions, or shut them off, depending on the party's priorities.

''This is a very reflective party,'' said David Shambaugh, a political scientist at George Washington University and author of ''China's Communist Party: Atrophy and Adaptation.'' ''They are adaptive, reflective and open, within limits. But survival is the bottom line. And they see survival as an outcome of adaptation.''

The ultimate question is whether adaptation alone is enough. Many analysts say that the lack of democratic reform is inhibiting China's economic efficiency and that reforms are needed to confront issues like stark inequality and environmental degradation. Thousands of protests erupt every year over illegal land seizures and official corruption. The Tibet crisis revealed Chinese nationalism as a major political force, even as it exposed unresolved domestic issues about freedom of religion and minority rights. To some analysts, the harsh official response to Tibet revealed an insecure, defensive leadership.

''The party doesn't have self-confidence in its legitimacy,'' said Zhang Xianyang, a liberal political analyst in Beijing. ''So the government overreacts in the face of social turbulence. I think the regime is not as strong as outsiders and the common people think.

''But they are not as weak as they feel themselves.''

Party Business

For the Communist Party, China's selection in July 2001 as host of the 2008 Olympics was a political and historic coup: a gift they could deliver to a thrilled citizenry and a new focal point, seven years in the distant future, that could be used to rally national pride.

Inside the party, leaders were intently focused on the viability of their system. The party faced no organized opposition; none is allowed. But the leadership, fretting about historical trends, had commissioned exhaustive autopsies of the collapse of the Soviet Union and the Eastern European governments. By June 2001, a month before the Olympic announcement, the Communist Party's Central Committee organization department, which oversees party promotions and training, had published a blunt report that revealed deep public anger and recommended ''system reforms'' to address problems of official corruption and incompetence.

China's economy was soaring, and the country was preparing for entrance into the World Trade Organization. But if free trade could boost China's exports, the party report also warned that deeper integration into the world economy ''may bring growing dangers and pressures, and it can be predicted that in the ensuing period the number'' of public protests ''may jump, severely harming social stability.''

The dismantling of the planned economy had already presented an ideological challenge: What to do about the emerging class of capitalists who were rapidly accruing wealth? Admitting capitalists struck old-guard Marxists as apostasy, but it made smart politics for a party leery of any group's emerging as a rival for power. Less than two weeks before the Olympic announcement, Jiang Zemin, who was president at the time, chose the party's 80th anniversary to declare that capitalists should be invited to join its ranks.

Reformers hoped private businesspeople might one day prove a force for democratization. But today, together with the flow of party officials into the business sector, the mixing of money and power has rendered sharp distinctions about the state and private sectors less meaningful than they seem in the West. Businessmen have established closer links to the government and the party to get access to state bank loans and tap into the network of officials who control land and government contracts. College students eyeing a career in government or academia often make the same calculation.

''The party seems happy with that,'' said Bruce Dickson, a China scholar at George Washington University and author of the new book, ''Wealth Into Power: The Communist Party's Embrace of China's Private Sector.'' ''They are not looking for die-hard ideologues. They want to co-opt people into their system. And they've been far more successful than people realize.''

Beyond managing the rise of private enterprise, the party also faced the collapse of much of the state-owned economy.

The state's share of the economy fell to about 35 percent in 2006 from 80 percent in 1997, according to a recent analysis in China Economic Quarterly. But that declining share does not reflect declining influence. The party's analysis of the collapse of the Soviet bloc faulted post-Communist countries for rushing too recklessly into privatization. To preserve the party's pre-eminence, senior officials adopted a policy of selling off small enterprises with lower profit margins while keeping a grip on the biggest industries.

Today, the state still exercises effective control over natural resources like oil, gas and coal; oil refining; production of steel and ferrous metals; telecommunications, transportation and power generation; and the financial system.

Arthur Kroeber, managing editor of China Economic Quarterly, said officials had injected competition into the state sector by pitting state-owned entities against one another without surrendering control over strategic industries.

''They have retained all the industries that have huge scale and large cash flow,'' he said.

Change Agent

If anything has been a change agent in Chinese society, it has been the Internet. In 2001, China had 26.5 million Internet users. Today the figure is 253 million, the most in the world. One of those millions is a software engineer named Lu Yunfei, who joined the crowds at Tiananmen Square on the night Beijing won the Olympics.

The next year, Mr. Lu began surfing the Web and soon stumbled across news accounts of a visit by Prime Minister Junichiro Koizumi of Japan to a war shrine honoring Japanese soldiers, including some accused of atrocities in China. Infuriated, he became one of the legion of the country's cybernationalists.

''I made a U-turn in my life as a result of the Internet, as a result of freedom of information,'' said Mr. Lu, now 33. ''The patriotism movement is a result of the development of the Internet.''

Freedom of information always has been considered essential in liberalizing China, and the Internet has disseminated amounts of information once unthinkable. Despite an Internet fire wall and tens of thousands of censors, dissidents still post petitions that once would have gone unheard. Farmers post videos of demonstrations on YouTube.

But nationalism also has flowered online into a complicated force that the party has often managed to cultivate for its own purposes. In 2005, amid a diplomatic standoff between China and Japan, thousands of Chinese protesters held raucous anti-Japan demonstrations in Beijing, Shanghai and other cities. Initially, the government condoned the outbursts, even though such protests are illegal. But eventually, as the protests expanded, the police shut them down.

This year's Olympic controversies pushed Chinese nationalism onto a world stage. In the days after the Tibetan riots, state media carried hours of coverage of ethnic Tibetans assaulting Han Chinese as well as television documentaries praising economic policies in Tibet. When Western leaders began calling on China to show restraint as it suppressed the uprising, Chinese nationalists rallied to the party's defense online.

The patriotic anger intensified in April after the ugly anti-China protests that marred the Olympic torch relay in London and Paris. Voices preaching moderation, or questioning the government's responsibility in the Tibet crisis, were drowned out. As happened three years earlier during the anti-Japan protests, officials initially gave tacit approval to the fervor and even a boycott of the French retailer Carrefour before reining things in to create a more harmonious image ahead of the Games.

Harnessing Pride

For the Communist Party, nationalism has always been a central justification of its rule. Schoolchildren are taught a heroic narrative of the party as the savior of China in 1949 and the savior of Tibet from feudalism and economic backwardness. If Westerners often view China through the prism of the Cultural Revolution and the 1989 Tiananmen crackdown, Chinese are taught about the Opium War and the colonialist advances into China by Japan and the West.

''Nationalism and patriotism mean love your country,'' said Mr. Zhang, the political analyst. ''The Communist Party was so clever because they linked nationalism to loving the party. They said the party was the same as the country.''

Li Datong, a former editor of a top state-run magazine who lost his job after clashing with propaganda authorities, said officials in charge of mass media and the Internet try to leave little to chance. He said the country's army of censors dipped anonymously into the Internet debate by paying part-time writers 5 mao, or about 7 cents, to steer public opinion and monitor the tone of debate online.

''Their job is to post articles on the B.B.S. to balance public opinion,'' Mr. Li said, referring to the Bulletin Board System where many Internet users interact. ''The netizens call them the 5 mao party. If they get a post on a B.B.S., they get 5 mao.''

Mr. Lu, the cybernationalist, said Chinese patriots made distinctions between country and party. During the Tibet crisis, he used his Web site to highlight provocative postings criticizing the Western news media or Tibet separatism, as part of the nationalist outpouring backing the party. But in recent weeks, the Internet has also been filled with angry posts -- many later censored -- blaming the government for a recent energy agreement with Japan.

When it comes to the Olympics, though, Mr. Lu's interests and the party's seem inseparable.

''For ordinary Chinese, even if they can't really articulate it, they feel the Olympics are a very important opportunity for China to demonstrate state power,'' Mr. Lu said.