SHANGHAI, June 29 — Shanghai is rightfully known as a fast-moving, hypermodern city — full of youth and vigor. But that obscures a less well-known fact: Shanghai has the oldest population in China, and it is getting older in a hurry.

Twenty percent of this city's people are at least 60, the common retirement age for men in China, and retirees are easily the fastest growing segment of the population, with 100,000 new seniors added to the rolls each year, according to a study by the Shanghai Academy of Social Sciences. From 2010 to 2020, the number of people 60 or older is projected to grow by 170,000 a year.

By 2020 about a third of Shanghai's population, currently 13.6 million, will consist of people over the age of 59, remaking the city's social fabric and placing huge new strains on its economy and finances.

The changes go far beyond Shanghai, however. Experts say the rapidly graying city is leading one of the greatest demographic changes in history, one with profound implications for the entire country.

The world's most populous nation, which has built its economic strength on seemingly endless supplies of cheap labor, China may soon face manpower shortages. An aging population also poses difficult political issues for the Communist government, which first encouraged a population explosion in the 1950's and then reversed course and introduced the so-called one-child policy a few years after the death of Mao in 1976.

That measure has spared the country an estimated 390 million births but may ultimately prove to be another monumental demographic mistake. With China's breathtaking rise toward affluence, most people live longer and have fewer children, mirroring trends seen around the world.

Those trends and the extraordinarily low birth rate have combined to create a stark imbalance between young and old. That threatens the nation's rickety pension system, which already runs large deficits even with the 4-to-1 ratio of workers to retirees that it was designed for.

Demographers also expect strains on the household registration system, which restricts internal migration. The system prevents young workers from migrating to urban areas to relieve labor shortages, but officials fear that abolishing it could release a flood of humanity that would swamp the cities.

As workers become scarcer and more expensive in the increasingly affluent cities along China's eastern seaboard, the country will face growing economic pressures to move out of assembly work and other labor-intensive manufacturing, which will be taken up by poorer economies in Asia and beyond, and into service and information-based industries.

"For the last two decades China has enjoyed the advantage of having a high ratio of working-age people in the population, but that situation is about to change," said Zuo Xuejin, vice president of the Shanghai Academy of Social Sciences. "With the working-age population decreasing, our labor costs will become less competitive, and industries in places like Vietnam and Bangladesh will start becoming more attractive."

India, the world's other emerging giant, also stands to benefit, with low wages and a far younger population than China.

Even within China, Mr. Zuo said, many foreign investors have begun moving factories away from Shanghai and other eastern cities to inland locations, where the work force is cheaper and younger.

As remote as many of these problems may seem today in Shanghai, the country's most prosperous city, evidence of the changes is already on abundant display. If Shanghai represents the future of China, it is in central Shanghai's Jingan district, where roughly 4,000 people, or 30 percent of the residents, are above 60, that one can glimpse that future.

Squads of lightly trained social workers monitor the city's older residents, paying regular house visits aimed at combating isolation and assuring that medical problems are attended to.

At 10 a.m. on a recent spring morning, Chen Meijuan walked up a narrow wooden stairway to the secondfloor apartment where Liang Yunyu has lived for the last 58 years.

"Good morning, Granny," Ms. Chen called out as she entered the 100-year-old woman's small bedroom. "Did you have a good night's sleep?"

Ms. Chen, 49, earns about $95 a month as one of 15 agents who monitor the neighborhood's elderly population. Her caseload exceeds 200.

"I usually pay visits to about five or six households a day, stay a little while and chat with them," she said. "For Grandma Liang I am a little more focused, visiting two or three times a week."

After being introduced to a foreign visitor, Ms. Liang regaled her guests with stories, ranging across the decades of the 20th century. She recounted the arrival of Japanese invaders in the city nearly 70 years ago, her opening of a kindergarten in 1958 and her husband's arrest and death in a labor camp during the Cultural Revolution 40 years ago.

"My daughter always invites me to live with her family, but I feel embarrassed to be with them," said, pausing from her tales. "I'm worried I might die in her home, so I prefer staying where I am."

Her son, Zha Yuheng, 76, a grandfather and retired textile industry worker, lives with her now, which also concerns her. "I am taken good care of here," she said, "but living with my son leaves him with a big burden, I'm afraid."

Mr. Zha protested that his mother was little trouble at all. "Every morning I get water for her and make sure it is not too hot or too cold, and she handles everything else on her own," he said. "She gets up, dresses, makes the beds and even makes food for herself."

In many wealthy societies the very old are candidates for nursing home care. That sector is still tiny in China, though, especially compared with the size of elderly population. Zhang Minsheng opened the city's first private nursing home in 1998 in an industrial area far from central Shanghai. It is now 95 percent occupied.

"People were not willing to enter nursing homes in the past, because they were considered places for those without descendants," Mr. Zhang said. "Now, from the standpoint of ordinary people, it is becoming a normal thing."

The average age of the residents of Mr. Zhang's home is 85, and most live several to a room, sleeping on narrow beds separated by flimsy partitions. Many pass the daytime hours in long corridors furnished with chairs, where they chat or simply stare into the distance.

The sheer magnitude of the aging phenomenon has Chinese officials and academics grasping for answers, but almost everyone agrees that there are no easy fixes. Population experts here speak of "patching one hole and exploding another."

China has a wide range of retirement ages, generally from 50 to 60. Raising the retirement age would relieve pressures on the pension system but make it harder for young people to find jobs. And it would be resented by many elderly people, most of whom have missed out on China's economic boom.

Lifting restrictions on internal migration raises the unwelcome prospect of a mass migration, while abandoning the one-child policy would be politically unpalatable.

The government has already tinkered with the policy. It now allows husbands and wives who were their parents' only children to have a second child, for example, and has eliminated a four-year waiting period between births for those eligible to have a second child.

But Chinese demographic experts say the leadership is unlikely to abolish the one-child rule, because it is reluctant to admit that one of its signature policies was in any way a failure — particularly in view of the disastrous population boom encouraged by Mao in the 1950's.

Moreover, lifting child-bearing restrictions might not help. Poorer people in the interior might have more children, but the rising middle class probably will not, experts say.

"More births would only change the structure of the population and prolong the aging process" of the society as a whole, said Ren Yuan, a professor at the Population Research Center of Fudan University in Shanghai. "But it has nothing to do with the number of old people. The scale of this large group has already become a reality. The beds you've got to add in nursing homes, the labor you need to take care of the old, is a reality than can't be changed."

XINZHENG, China, June 21 — Shengda College in central China has a diverse curriculum, foreign faculty members to teach English and a manicured campus, where weeping willows shade a recreational lake.

But many students paid the college's rich tuition — at $2,500 a year one of the highest in China — primarily because Shengda promised that their diplomas would bear the name of its parent, Zhengzhou University, a more prestigious national-level institution, and not mention Shengda at all.

So when the graduating class of 2006 received diplomas that read "Zhengzhou University Shengda Economic, Trade and Management College," students erupted last Friday, ransacking classrooms and administrative offices, shattering car windows, scuffling with the police and staging one of the most prolonged student protests since the 1989 pro-democracy uprising that filled Tiananmen Square in central Beijing.

The protest, still simmering on Shengda's now tightly guarded campus, reflects the reality that the country's exploding population of college students must grapple with petty fraud, substandard instruction and an intensely competitive job market. Students, a traditional bellwether of political volatility in China, have become a fresh source of unrest in a society already angered by land grabs, unpaid wages and environmental abuse.

Once a magic ticket into the government or business elite, college has become an expensive gamble for millions of cash-short families who find that even the most prestigious degrees cannot guarantee success in a market economy.

The number of college graduates has multiplied fivefold in the last seven years, to an estimated 4.1 million this year. But at least 60 percent of that number are having trouble finding jobs, according to the National Development and Reform Commission.

Students at Shengda, a privately run college with 13,000 students outside Zhengzhou, the capital of Henan Province, say they were assured on admission, and repeatedly afterward, that they would get graduation certificates that would appear identical to those issued by Zhengzhou, the top university in the province.

Most Shengda students did not perform well enough on national college entrance exams to enroll at Zhengzhou University itself, where the tuition is about $500 a year. So Shengda's promise persuaded students and their families to pay unusually steep tuition to gain an edge in the job market. What many of them say they did not know is that under a national regulation phased in beginning in 2003, the college is now required to use its own name on diplomas.

When this year's graduating seniors picked up their diplomas on Friday and saw the revised language, the reaction was instantaneous — and incendiary.

"We bought a Mercedes-Benz and they delivered a Santana," said one angry graduate, Wang Guangying, referring to a low-priced Volkswagen sedan made in China. "By that night, school officials had totally lost control."

Beer bottles rained down from dormitory windows, leaving a carpet of broken glass on the walkways. Television sets and washing machines followed, according to students who participated and photos of the post-riot scene.

Groups of students marauded around the campus, smashing cars, offices or any piece of property they felt belonged to someone in power. The front gate and a statue of the college's founder were toppled.

The local police arrived to break up the protest, but they retreated after they were barraged by bottles and rocks. Riot squads from Zhengzhou arrived about 3 a.m. Saturday, students said, after the violence had begun to subside.

The authorities sealed the campus and prevented most students from leaving. But marches and sit-ins continued in front of college headquarters through Wednesday, students said. Protesters shouted, "Give back my Zhengzhou University diploma!" Others demanded a refund or a discount on their tuition and a full apology from the headmaster, Hou Heng.

They scored at least a partial victory. Mr. Hou said Wednesday in a telephone interview that he had resigned after being told to do so by his superiors at Zhengzhou University.

He acknowledged that some promotional literature had "failed to state clearly" that Shengda would amend its diplomas. He denied that Shengda had intentionally provided false information but said he had to take responsibility for the unrest.

"I'm fulfilling the wishes of the people above," he said.

Shengda's problem with diplomas is not unique. In 1998 the government encouraged a vast expansion in college-level education. Hundreds of new colleges were founded almost overnight to accommodate millions of new students thought to be needed as engineers, bankers, traders and marketing experts in the fast-growing economy.

Under the regulations, new colleges had to find "mother schools" to supervise them. They used that link to their advantage. New colleges charged higher tuitions than the mother schools charged — Shengda's fees are nearly five times those of state-run Zhengzhou University — because they gave students who did not test highly the chance to affiliate themselves with a top college or university.

Not all of them went as far as Shengda in issuing diplomas that carried the name of the mother school, but some did. And when the authorities put an end to the practice, students reacted harshly.

In the northeastern city of Dalian, for example, some 3,000 students at the East Soft Information Institute, set up jointly by Northeast University and the East Soft Group Company, attacked campus facilities in December, sending several teachers to the hospital. They rioted after they were told that the word online would distinguish their diplomas from the regular ones issued by Northeast University.

At Shengda, the downgraded diploma struck some students as a body blow, one that could cripple their chances of securing a good office job.

"There are not many positions open in the business world compared with the number of applicants, and they all go to the national-level university graduates," said a Shengda junior studying transportation, who asked to be identified only by his surname, Wang, to avoid angering college authorities.

Mr. Wang, who spoke by telephone from inside the sealed campus, said he came from an impoverished farming community in Henan. His parents devoted their savings and borrowed heavily from friends and relatives to pay his tuition, which he said greatly exceeded his family's annual income.

"I do not support violence, but the spirit of the students just collapsed," he said. "The school must admit its error and refund our money."

His anger stems partly from the fact that most fresh college graduates will not find work that comes close to meeting their expectations, meaning they will have to struggle to pay off the debts their relatives shouldered on their behalf.

By the government's tally, China's economy, though growing by about 10 percent a year, will add about 1.6 million positions for people with college degrees this year. The country produced 4.1 million new college graduates.

A growing cadre of highly educated but underemployed urbanites is tailor-made to cause alarm in Beijing, which has always feared student unrest above nearly all other forms of social discontent.

Disgruntled students have often taken the lead in national protests against corrupt, inefficient or repressive officials. They have also inflated seemingly minor grievances affecting their personal prospects into broader political campaigns, as they did during the student-led pro-democracy demonstrations in 1989.

One of the Communist Party's greatest successes since that upheaval has been to create strong support for the market economy among urban residents, intellectuals and their children.

That bond has held strong for more than a decade, even as China has been engulfed in other types of unrest, including nearly 80,000 mass protests recorded in 2005 alone. Most such events involve peasants, migrant workers or workers laid off from state enterprises, who often lack media-savvy leaders and rarely demand substantive political change.

The situation could change if large numbers of students got involved, though there is no sign that the scattered protests at colleges will lead in that direction anytime soon.

Even so, China's cabinet announced new policies in May to enhance the value of degrees from vocational schools and high schools. The measures are aimed at reducing college enrollment, the cabinet said in a statement, without specifying a target.

"This is a good step for gradually solving conflicts in universities, especially to relieve the pressure on graduates finding jobs," the statement read.

In the short term, at least, college campuses are like kindling awaiting a spark. Even as the protests at Shengda were under way, thousands of students at the Jiangan campus of Sichuan University hurled bottles and barrels out their windows to protest the lack of electrical power at night.

Some students said they needed electricity at all hours to study for annual exams. But according to The Sun, the Hong Kong newspaper that first reported on the incident, the main grievance was that students needed power through the wee hours so they could watch live broadcasts of the World Cup soccer tournament.

BEIJING, June 19 — Like an otherworldly emperor, Stephen Hawking rolled his wheelchair onto the stage of the Great Hall of the People on Monday, bringing with him the royalty of science and making China, for this week at least, the center of the cosmos.

Slouching in profile, draped in black and moving no more than an eyelid to send his words to a mesmerized audience of 6,000, Dr. Hawking ruminated on the origin of the universe as the headliner of an international physics conference.

"We are close to answering an age-old question," he concluded. "Why are we here? Where did we come from?"

But as weighty as his speech was, his mere presence was a powerful symbol of what China is and would like to be.

China wants to stand up scientifically, as it is beginning to economically, and it is pouring money and talent into the sciences, particularly physics. Jie Zhang, director general of basic sciences for the Chinese academy, said his budget had been increasing 17 percent a year for the last few years as China tried to ramp up research spending to about 2.5 percent of its gross domestic product. By comparison, the United States spends slightly less than 2 percent, according to the National Science Foundation.

Among the big-budget items on the table, Dr. Zhang said, are a giant 500-meter-diameter radio telescope in China's outback to study microwaves from the Big Bang and a multinational particle-physics project, known as the Daya Bay Reactor Neutrino Experiment to study the ghostly elementary particles known as neutrinos.

To keep track of all this activity, the United States National Science Foundation opened an office in Beijing last month. The foundation noted that China had gone from fourth in the world to third in research and development expenditures from 2000 to 2006.

While some scientists express doubts that China is open enough to foster top-tier science, others are enthusiastic.

"China is changing at a rate that is truly amazing," said David J. Gross, the director of the Kavli Institute for Theoretical Physics at the University of California, Santa Barbara, and a recent Nobel Prize winner, who has been visiting to help reorganize the Beijing theoretical institute into a model that can be used for future research institutes.

Dr. Hawking's talk was part of the very public kickoff of Strings 2006, which has drawn 800 of the world's brightest and most ambitious physicists here for a week to take stock of string theory, their vaunted "theory of everything" that says the elementary constituents of nature are submicroscopic vibrating strings.

Imagine, several string theorists in the audience mused, if a physics conference in the United States started in the House of Representatives.

As he opened the conference, Chun-Li Bai, the executive vice president of the Chinese Academy of Sciences, stressed that basic scientific research had a "high visibility" in the most recent of China's five-year plans. "The next 50 years will be of beauty for the development of Chinese science and technology, as well as economic development," he said.

Calling string theory the cutting edge of curiosity, Shing-Tung Yau, a Harvard mathematics professor and the meeting's chief organizer, said he hoped to make China more involved in the field. "I want to put on a good show," he said.

Dr. Hawking, 64, is always a good show, and his arrival set off a stellar burst of camera flashes worthy of any rock star. A cosmologist at the University of Cambridge, he has been in a wheelchair for most of his life because of amytrophic lateral sclerosis, or Lou Gehrig's disease. But he has nevertheless become one of the leading gravitational theorists, an avatar of mysteries of black holes and the origin of spacetime, as well as a best-selling author, a father of three, an indefatigable world traveler and a guest star on "The Simpsons" and "Star Trek: The Next Generation."

He speaks with the aid of a computer-driven voice synthesizer. He used to operate it with his thumb but is now so weak that he has to use an infrared device that tracks his eye movements. So the camera flashes were potentially catastrophic, and Dr. Yau ordered the photographers away.

Dr. Hawking's star turn, across the street from the large portrait of Mao Zedong, also had historic resonance. In the Cultural Revolution, Mao denounced Einstein and his work as reactionary and bourgeois. Groups of scientists and scholars were set up to criticize relativity because it appeared to collide with Marxist dogma that the universe was infinite and endless, eternally embroiled in a sort of cosmic class struggle.

History has buried those aspects of Marxist thought. Chinese leaders now are technocrats, not "cosmocrats," as Yinghong Cheng, a historian at Delaware State University who has studied the cultural revolution, put it. Prime Minister Wen Jiabao wished good health to Dr. Hawking.

Hardly a week goes by without an announcement of another research initiative or new investment in a building or an institute. It is hard to find an American physicist who is not on his way to China to consult or collaborate, or has just come from China, glowing about the experience.

"The Chinese are so smart they knock your socks off," said Andrew Strominger, a Harvard string theorist who visits here often. "The impression you get when you go over there is that China is going to take over the world soon."

This week, Fred Kavli, the inventor and philanthropist whose foundation has endowed 10 research institutes in the West, announced that he would endow two new Kavli institutes in Beijing — at the Institute for Theoretical Physics at the Chinese Academy of Sciences and at Beijing University's Institute for Astronomy and Astrophysics — for several million dollars each. Both will be linked in a network with the others. Every summer, hundreds of Chinese-American scientists, so-called overseas Chinese, leave their posts in the United States and elsewhere to return to help out, lured by lucrative salaries, prestige and the chance to "help China."

Marvin I. Cohen, a professor at the University of California, Berkeley, who is president of the American Physical Society, said physics had come in for special attention in this effort, for its centrality to science and what he calls its rigorous approach.

Dr. Cohen was impressed by an up-to-date physics building that he saw in Beijing. "Someone writes a $10 million check, and they build the building in Beijing that we wanted in Berkeley," he said.

Putting up buildings is easy compared with filling them with the right people. Despite all the hype, most researchers say, their best students are so far staying in the United States. The system, everyone seems to agree, is rife with politics, and the sudden influx of money has created opportunities for corruption and fraud.

Last month, a star chip designer, Jin Chen, was fired by Shanghai Jiaotong University after a Web site run by a biochemist in San Diego, Shi-min Fang, disclosed that his design for a ballyhooed new signal-processing chip had been stolen.

That and similar incidents led 120 biologists to sign a letter written by a researcher at Indiana University, Xin-Yuan Fu, calling for a government office to investigate science misconduct. The Education Ministry has since set up a special commission to study misconduct. Dr. Yau said he was pleased to see China take the problem seriously, adding that there were many more incidents of fraud.

"They want to catch up too fast," Dr. Yau said. "They want to leapfrog."

Some scientists remain skeptical. Rather than adding a government commission, China should safeguard research by encouraging openness, said Fang Li-Zhi, an astrophysicist now at the University of Arizona who fled to the United States Embassy in the massacre of democracy movement demonstrators in the Tiananmen Square massacre in 1989.

Today, he noted, the Chinese characters for his name are blocked on the Chinese Internet.

"You should allow people to speak, and share their opinion freely," he said. "That is a basic foundation."

Dr. Gross, who was in China at the time of the Tiananmen massacre and resisted returning for 13 years, said that culture change was the difficult part of China's modernization but that there were positive signs. He recalled seeing plans for a building that the Institute for Theoretical Physics is constructing and being horrified to find it made up of little rooms.

"It looked like a prison," he said.

The latest philosophy in the West is to make physics buildings like irregular little mazes with blackboards and couches around every other corner, to encourage encounters and collaboration. The Beijing institute, he said, is now planning to remodel the inside of its building.

"A lot of people ask for advice but are hesitant to accept it," Dr. Gross said. "In China, they are totally open to exploring how other countries do it. They are totally unarrogant about accepting advice."

Dr. Gross, who has a well-known fondness of cigars, was smoking one under a giant drawing of Mao backstage after his own talk on Monday at the Great Hall when an official came in and said nobody had done that since Deng Xiaoping, China's former paramount leader who died in 1997.

But, Dr. Gross related with a smile, "He said, 'You're allowed.' "

NEW YORK (CNNMoney.com) - When Lenovo announced early last year that it would buy IBM's personal computer business, the company's shares surged.

But the American depository receipts (ADRs) of the Chinese company have fallen 26 percent since the start of the year, despite what industry analysts view as a largely successful integration of the IBM (down $0.51 to $80.15, Research) PC business. Lenovo (down $0.10 to $6.80, Research) is the number one PC vendor in China, one of the world's fastest-growing markets for PCs, and ranks third overall, according to industry researcher Gartner Group.

XINZHUANG, China — This winter, Liu Xianhong's life was changed for the second time by her infection with AIDS.

The first time was seven years ago, when she discovered that she, along with her newborn son, had contracted the disease through an infusion of contaminated blood given to her during childbirth.

Then late last year, her story was publicized by a leading Chinese journalist, turning one woman's quest for compensation into a national cause célèbre for a new class of advocates who are using the country's legal system to fight for social justice.

Ms. Liu's experience, all but unimaginable as recently as two or three years ago, is increasingly common in China, where a once totalitarian system is facing growing pressure from a population that is awakening to the power of independent organization. Uncounted millions of Chinese, from the rich cities of the east to the impoverished countryside, are pushing an inflexible political system for redress over issues from shoddy health care and illegal land seizures to dire pollution and rampant official corruption.

Ms. Liu first sought help in November, after hearing rumors that she was about to be arrested here in her hometown in this dismal region of northern China for protesting her infection at the local Communist Party headquarters. She met with an employee of the blood bank in Xingtai who had publicly accused it of distributing contaminated blood to her and more than a thousand others.

He took her to Tiananmen Square in Beijing, the country's most famous site, where the crowds of people who show up from all over China each morning to watch the flag-raising ceremony provide a measure of anonymity.

There Ms. Liu met Hu Jia, one of China's leading advocates for people with AIDS. It was the 32-year-old woman's introduction to the world of nongovernmental organizations, or NGO's, which are fighting for better treatment of people with the disease.

In the space of a few weeks, she returned to Beijing twice more for meetings that were scheduled and rescheduled in different locations, to avoid detection by the police. It was through those meetings that she met one of the country's most aggressive investigative reporters, Wang Keqin, who brought her case to the attention of China's rising advocate class, who began championing her cause.

China's leaders seem to be of two minds in confronting the trend. Predictably enough, many warn of the dangers an independent civil society poses to the authority of the state. But there are others who now recognize, however tentatively, that the government cannot deal effectively with every issue without contributions from advocates, civic organizations and intellectuals.

That ambivalence was illustrated clearly this past winter. In February, Mr. Hu, the advocate, was detained and held without explanation for six weeks. But on March 1, Beijing introduced stricter nationwide regulations governing the collection and distribution of blood products by the banks, a development that advocates attribute at least partly to their work.

"Two years ago, if you raised issues, the government basically ignored you," said Wan Yanhai, the director of Aizhixing, a nongovernmental organization based in Beijing, which petitioned the Justice Ministry on the blood contamination issue. "Nowadays, there will be feedback."

How the state will resolve the ambiguities is uncertain. In the opinion of some experts, however, it is already too late to turn back the clock.

"This is the way things happened in Taiwan, too," said Merle Goldman, emerita professor of Chinese history at Boston University and the author of the recently published book, "From Comrade to Citizen: the Struggle for Political Rights in China."

"In the early 50's they started to have village elections, which went from the village level and kept moving up. Then they started having NGO's, and then other independent groups and finally independent parties. The government would periodically crack down on them, but they kept coming back."

A similar pattern is clearly evident in the scandal surrounding the blood bank. When Mr. Wang wrote the articles that gave it renewed nationwide attention in late November, censors barred major online news services from mentioning them.

But the information made its way around China anyway, as Mr. Wang and countless others e-mailed copies of the stories to people with interests in social issues, including the lawyers who eventually took up the matter.

When Ms. Liu first began protesting last fall, the police in Xingtai beat her, her husband and several other relatives in an effort to quiet them, she said. Later, when she formed her own organization, known simply as the Care Group, the local government declared it illegal and threatened to seize its assets, the Chinese media reported. But she persevered, and she was not thrown in jail, as might have happened only a few years ago. In the capital, where she traveled for the last time in early January to attend a meeting with advocates, NGO members and lawyers involved in seeking compensation for the Xingtai AIDS patients, the gathering had to be repeatedly rescheduled.

In some cases, the rescheduling was because hotels and conference halls were warned by the police not to permit the group to use their facilities. In one instance, the police insisted that the group provide in advance a written agenda of the meeting, along with the names of all the participants.

In addition, the Beijing Judicial Department, which accredits and disbars lawyers, warned those attorneys who had pledged to help the Xingtai AIDS patients to stay away from the meeting. But other lawyers took their places.

In the end, to evade the police, the meeting was held with only an hour's notice.

"The idea is not to have a couple of figures leading the way to change," said Jiang Tianyong, a Beijing lawyer who has been involved in the AIDS case. "The idea is to have many, many people playing different roles, each taking his own responsibility. What's different from the past is that once, if you cracked down on someone, there would be a time of quietness. Nowadays, if they knock someone out, another person or several others step forward."

This resilience is as much in evidence among nongovernmental organizations as it is among lawyers. Those organizations have become critical players in driving social change and reform. Officially, there are about 280,000 of them registered in China, an extraordinary number considering there were virtually none as recently as the early 1990's. Some experts estimate there are now two million to eight million such groups, many of them very small and most of them simply ignoring government registration requirements.

"There are many NGO's, and most tend to be nonconfrontational," said Mr. Wan, the director of Aizhixing in Beijing. "We prefer to be critical and nonconfrontational, but sometimes you become confrontational if you have to."

Armed with a wealth of new contacts and information, Ms. Liu returned home from Beijing with a more advanced treatment regimen for her disease and a lawyer who quickly filed suit seeking compensation. Yet, there are few, if any, outright victories in this arena, and the success of her court action is far from assured.

More often, the advocates calculate their progress by inference. While Ms. Liu is still fighting in the courts, at least four other Xingtai AIDS patients have received compensation, either in court awards or negotiated settlements. Recently, the government made a major concession in another case of blood contamination, allowing hemophiliacs to pursue compensation claims in court, and a senior health official stated publicly that nongovernmental organizations are making a significant contribution to the AIDS issue.

Meanwhile, Ms. Liu has decided that the role of simple victim no longer suits her, so she has begun assisting others through her Care Group, which she started this year with two men whose wives were killed by contaminated blood from the Xingtai bank.

"I saw people from a dozen different places in China with these kinds of difficulties," said Ms. Liu, sitting in her barely furnished and freezing cold living room here, her son, Zhu Mengchang, by her side. "I realized that the people in these other places were far better organized than we were. They'd been in contact with the outside world, and had received a lot of assistance."

For Mr. Hu, the small victories that Ms. Liu and others are winning represent the first stirrings of an irresistible tide of change.

"I live in Beijing, and three weeks ago there was almost no green," he said in an interview after his release from detention. "Now it is green every day. You wouldn't notice it if you were living it day to day, but the greenness is blooming everywhere now. It is the same with civil society, or with NGO's. Now there is a citizens' consciousness to participate, a willingness to defend their rights. Call it civic power."

The New York Times

April 3, 2006

SHENZHEN, China — Persistent labor shortages at hundreds of Chinese factories have led experts to conclude that the economy is undergoing a profound change that will ripple through the global market for manufactured goods.

The shortage of workers is pushing up wages and swelling the ranks of the country's middle class, and it could make Chinese-made products less of a bargain worldwide. International manufacturers are already talking about moving factories to lower-cost countries like Vietnam.

At the Well Brain factory here in one of China's special economic zones, the changes are clear. Over the last year, Well Brain, a midsize producer of small electric appliances like hair rollers, coffee makers and hot plates, has raised salaries, improved benefits and even dispatched a team of recruiters to find workers in the countryside.

That kind of behavior was unheard of as recently as three years ago, when millions of young people were still flooding into booming Shenzhen searching for any type of work.

A few years ago, "people would just show up at the door," said Liang Jian, the human resources manager at Well Brain. "Now we put up an ad looking for five people, and maybe one person shows up."

For all the complaints of factory owners, though, the situation has a silver lining for the members of the world's largest labor force. Economists say the shortages are spurring companies to improve labor conditions and to more aggressively recruit workers with incentives and benefits.

The changes also suggest that China may already be moving up the economic ladder, as workers see opportunities beyond simply being unskilled assemblers of the world's goods. Rising wages may also prompt Chinese consumers to start buying more products from other countries, helping to balance the nation's huge trade surpluses.

"The next great story in China is how they are going to move out of the lower-end stuff: the toys, textiles and sporting goods equipment," said Jonathan Anderson, an economist at UBS in Hong Kong. "They're going to do different things."

When sporadic labor shortages first appeared in late 2004, government leaders dismissed them as short-lived anomalies. But they now say the problem is likely to be a more persistent one. Experts say the shortages are arising primarily because China's economy is sizzling hot, tax cuts have helped keep people working on farms, and factories are continuing to expand even as the number of young Chinese starts to level off.

Prosperity is also moving inland, and workers who might earlier have migrated elsewhere are staying closer to home.

Though estimates are hard to come by, data from officials suggest that major export industries are looking for at least one million additional workers, and the real number could be much higher.

"We're seeing an end to the golden period of extremely low-cost labor in China," said Hong Liang, a Goldman Sachs economist who has studied labor costs here. "There are plenty of workers, but the supply of uneducated workers is shrinking."

Because of these shortages, wage levels throughout China's manufacturing ranks are rising, threatening at some point to weaken China's competitiveness on world markets.

Li & Fung, one of the world's biggest trading companies, said recently that labor shortages and rising manufacturing costs in China were already forcing it to step up its diversification efforts and look for supplies from factories in other parts of Asia.

"I look at China a lot differently than I did three years ago," said Bruce Rockowitz, president of Li & Fung in Hong Kong, citing the rising costs of doing business in China. "China is no longer the lowest-cost producer. There's an evolution going on. People are now going to Vietnam, and India and Bangladesh."

The higher wages come at a time when costs are already rising sharply across the country for energy and land. On top of a strengthening Chinese currency, this is likely to mean that the cost of consumer goods shipped to the United States and Europe will rise.

To be sure, China is not about to lose its title as factory floor of the world. And some analysts dispute the significance of the shortages.

"Reports of a shortage of unskilled and semi-skilled factory workers are overblown," said Andy Rothman, an analyst at CLSA, an investment bank. "Companies are, however, having trouble finding experienced people to fill midlevel and senior management jobs."

The lack of workers is most acute in two of the country's most powerful export regions: the Pearl River Delta, which feeds into Hong Kong, and the Yangtze River Delta, which funnels into the country's financial capital, Shanghai. Wages are rising significantly in both areas.

According to government figures, minimum wages — which averaged $58 to $74 a month (not including benefits) in 2004 — have climbed about 25 percent over the past three years in big cities like Shenzhen, Beijing and Shanghai, mostly by government mandate.

Wages at larger factories operated on behalf of multinationals — which are typically $100 to $200 a month — are also on the rise.

Here in Shenzhen, one of the first cities to benefit from the country's economic reforms, factory operators say finding low-wage workers is harder than ever. At the Nantou Labor Market, where hordes of people used to come to find jobs, there are now mostly lonely employment agents.

"The people coming here are fewer and fewer," said a woman named Miss Li, who works at the Xingda Employment Agency. "All the labor agencies face the same problem. A lot of young people are now going to the Yangtze River area, where there are higher salaries."

In Guangdong Province late last year, the government said factories were short more than 500,000 workers; and in Fujian Province, there was a shortage of 300,000.

Even north of Shenzhen, Zhejiang Province, known for its brash entrepreneurs, is short about 200,000 to 300,000 workers this year, government officials say. The Wahaha Group, a Chinese beverage maker based in the city of Hangzhou, is one of the region's rising corporate stars. But one of the company's 500-worker factories is short by 50.

"It seems to become more and more serious year by year," said Sun Youguo, the company's human resources manager. "Because of the shortage we're paying more attention to migrant workers. We're now building a dormitory to house couples."

Government policy is playing a role in creating the coastal labor shortages. Trying to close the yawning income gap between the urban rich and the rural poor in China, the national government last year eliminated the agricultural tax, and it also stepped up efforts to develop local economies in poor, inland and western provinces, which have mostly been left behind.

Now, even remote areas are starting to develop — sprouting malls, housing projects, restaurants and infrastructure projects. These are creating jobs in the middle of the country and offering alternatives to many young workers who once were forced to travel thousands of miles for jobs on the coast.

According to Goldman Sachs and other experts, the beginnings of a demographic shift have already been reducing the number of young people between the ages of 15 and 24, who make up much of the migrant labor work force. Similarly, the number of women between the ages of 18 and 35 began falling this year, according to census data.

The women are critical because China's factories like to hire many women from the countryside, who have been willing to migrate for three-to-five-year stints to earn money as factory workers before returning home with bundles of cash and fresh hopes of finding a marriage partner.

China's one-child policy is also aggravating the shortages. With the first generation of young people born under the one-child policy now emerging from postsecondary education, many of them see varied opportunities not available to an earlier generation.

"When the economic reform started, migrant workers were very hard-working, and usually stayed for a long time at factory jobs, but the new generation has changed," said Chen Guanghan, a professor at Zhongshan University in Hong Kong. "They are reluctant to take factory jobs that are harsh and pay very little."

Many are going to college to avoid the factory floor. Last year, Chinese colleges and universities enrolled over 14 million students, up from about 4.3 million in 1999.

Workers are sharing more information about factory conditions among friends and learning to bargain and leap from job to job. They are also increasingly ambitious.

"There's still a lot of cheap labor, but Chinese workers are getting skilled very quickly," said Ms. Hong at Goldman Sachs. "They are moving up the value chain faster than people expected."

Economists may continue to debate the severity of the shortages, but there is little doubt that the waves of migrants who once crowded into the booming coastal provinces are diminishing.

As a result, manufacturers are already starting to look for other places to produce goods.

"Many companies are already moving to Wuhan, Chongqing and Hunan," Ms. Hong said, ticking off the names of inland Chinese cities. "But Vietnam and Bangladesh are also benefiting. We're bullish on Vietnam."