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The Chinese claim a history of 5000 years - the dawn of which is steeped in myth and legend - while its bulk is a seemingly endless succession of dynasties. The existence of the first dynasty, the Xia, is still to be archaeologically verified but is accepted as lasting from 2200 to 1700 BC, and is described in legends as having been preceded by a succession of god-like sovereigns and emperors who bestowed the gifts of life, hunting and agricultural knowledge. The verified existence of ensuing dynasties is similarly hazy, but clarity increases with each era, revealing agricultural societies who practised a form of ancestor worship. The Zhou period (1100-221 BC) saw the establishment of enduring political concepts such as the `mandate of heaven' - in which the right to rule was given to the just and denied to the evil and corrupt, leading to the later Taoist view that heaven's disapproval was expressed through natural disasters such as earthquakes, floods and plagues of insects. Along with Taoism, the Zhou period also saw the emergence of Confucianism.

The Chinese were united for the first time into a single empire during the Qin dynasty (221-207 BC), an era which bequeathed administrative institutions which were to remain features of the Chinese state for the following 2000 years. As well as introducing centralised control, the dynasty standardised weights and measures and the writing system; construction of the Great Wall was also undertaken during this period. The ensuing Han dynasty (206 BC-220 AD) was a period of consolidation and expansion, when contact with the `barbarians' who surrounded the empire brought both military conflict and commercial gains. The empire split into the Three Kingdoms and further into a string of kingdoms and fiefdoms which competed for power. Curiously, these war-torn centuries also saw the flowering of Buddhism and the arts.

Unity arose out of the chaos under the Sui dynasty (589-618) and was consolidated under the Tang (618-908), commonly regarded as the most glorious period of Chinese history. The empire was divided into 300 prefectures and 1500 counties, a regional breakdown that persists to this day. Military conquests re-established Chinese control of the silk routes, and society was `internationalised' to an unprecedented degree, with foreign contact being established as far away as Persia, India, Indonesia and Japan. Buddhism flourished under the Tang, splitting into two distinct schools: the Chan (Zen) and Pure Land (Chinese Buddhist).

Power was again centralised under the Song dynasty (960-1279), generally divided into the Northern and Southern Song and known for its strong government, renewal of Confucian learning, civilian-dominated bureaucracy and urban and commercial revolutions (it was during the 13th century that Marco Polo commented on the grand scale of China's prosperous cities). The Mongol rule of the Yuan dynasty (1271-1368) was established by Kublai Khan, grandson of Mongol invader Genghis Khan. The Mongols established a capital at what is now Beijing, and militarised the nation's administration. The Chinese were relegated to third and fourth-class citizens, and, unsurprisingly, by the middle of the 14th century the country was convulsed by rebellion. A Buddhist novice called Hongwu arose from the chaos to establish the Ming dynasty (1368-1644), with capitals at Beijing and Nanjing. Maritime power was established for the first time, and expeditions sailed to South-East Asia, Persia, Arabia and even eastern Africa.

The first European ships to anchor off the coast of China were Portuguese, arriving in 1516. A trade mission was established in Macau by 1557, but it was not until 1760 that other powers gained secure access to Chinese markets via a base in Guangzhou. The British, Dutch and Spanish traded via a monopolistic guild known as the Cohong, which served to keep foreigners at arm's length from the political centre in Beijing. Trade flourished, but in China's favour, as British purchases of tea, silk and porcelain far outweighed Chinese purchases of wool and spices. In 1773 the British decided to balance the books by encouraging the sale of opium. The requisitioning of some 20,000 chests of opium by the Chinese in 1839 was just the excuse the British needed to militarise its presence in China, and by 1840 the Opium Wars were on.

Warfare and resulting treaties in British favour led to the cession of Hong Kong and the signing of the humiliating Nanjing Treaty. These final years of the Qing dynasty were administered by Empress Dowager Wu Cixi, a reactionary leader who saw all attempts to reform her country's ancient institutions as a threat to her government. Her failure to adapt to the changing circumstances led to rebellion and civil unrest, and a land-grabbing spree by the Western powers that saw China carved up into spheres of influence. The US-proposed free-trade Open Door Policy was accepted by the Chinese as an alternative to outright foreign control. China's colonial possessions soon evaporated, with Vietnam, Laos and Cambodia falling to the French, Burma to the British, and Korea and Taiwan to Japan.

The first half of the 20th century was a period of utter chaos, with forces jostling for power in the wake of the Qing dynasty. Intellectuals searched for a new philosophy to replace the old Confucian order, while warlords attempted to grab imperial power. Sun Yatsen's Kuomintang (the KMT, or Nationalist Party) established a secure base in southern China and began training a National Revolutionary Army (NRA) with which to challenge the northern warlords. Meanwhile, talks between representatives of the Soviet Comintern and prominent Chinese Marxists resulted in the formation of the Chinese Communist Party (CCP) in 1921. Hopes of the CCP aligning with the KMT were foiled by Sun Yatsen's death and the rise from the KMT of Chiang Kaishek, who favoured a capitalist state dominated by a wealthy elite and supported by a military dictatorship. Chiang Kaishek set out to put a violent end to both the growing Communist influence and the power of the northern warlords, and by mid-1928 a national government had been established at Beijing, with Chiang holding both military and political leadership.

The Communists were split between those who focused on urban revolt and those who believed victory lay in uniting the countryside. Mao Zedong established his forces in the mountains of Jinggangshan, adopting a strategy of guerrilla warfare, and by 1930 the ragged forces had transformed into an army of 40,000. Four extermination campaigns were made against the Communists by Chiang, each time resulting in Communist victories due to their strategy of launching short attacks rather than pitched battles. Chiang's fifth campaign was very nearly successful because the Communists ill-advisedly changed their strategy and met head-on with the KMT in battle. Hemmed in, the Communists decided to retreat from Jiagnxi and head north to Shaanxi - the Long March of 1934. Of the 90,000 who started out, only 20,000 made it to their destination, one year and 8000 km later. En route the Communists armed the peasants they encountered and redistributed the land they passed through. The Communists proved that, given a method, an organisation, leadership, hope and weapons, the Chinese people could fight. During the march, Mao was established as the paramount leader of the CCP.

In 1931 the Japanese had taken advantage of China's state of chaos to invade Manchuria, setting up a puppet state with the last Chinese emperor, Puyi, as the symbolic head. Chiang Kaishek did little to halt the advance of the Japanese, who by 1939 had overrun most of eastern China; instead he continued to obsessively oppose the Chinese Communist forces. By the end of WWII, and Japan's surrender, China was in the grip of all-out civil war as a dramatic power struggle between the KMT and CCP came to its bitter conclusion. Three great battles were fought in 1948 and 1949 which saw the KMT defeated, and hundreds of thousands of KMT troops changing sides to join the CCP. On 1 October 1949 Mao Zedong proclaimed the foundation of the People's Republic of China (PRC). Chiang Kaishek fled to Taiwan, taking with him the country's entire gold reserves and what was left of his air force and navy. The USA continued to recognise Chiang as legitimate ruler of China, and provided a naval blockade to prevent an attack on Taiwan from the mainland.

The PRC began its days as a bankrupt nation, but the 1950s ushered in an era of great confidence. The people were bonded by the Korean War and worked to defend the new nation from possible US invasion, and by 1953 inflation had been halted, industrial production had been restored to prewar levels, the redistribution of land had been carried out and the first Five Year Plan had been launched. The Party increased its control by organising the people according to their work units and dividing the country into 21 provinces, five autonomous regions, two municipalities (Beijing and Shanghai) and around 2200 county governments. Concurrently, many KMT intellectuals who had stayed on were `re-educated', while writers and artists were subject to strict ideological controls. But pehaps the most tragic consequence of the Party's dominance was the `liberation' (read invasion) of Tibet in 1950 by Chinese forces. In the space of 20 years, Beijing oversaw the enforced exile of the Tibetan spiritual leader along with 100,000 fellow Tibetans, the death of 1.2 million who stayed behind, and the destruction of a serene and precious culture. Today, the destruction is by no means over.

The next plan was the Great Leap Forward, aimed at increasing agricultural production and jump-starting the economy into first-world standards overnight. Despite oodles of revolutionary zeal, the plan was stalled by inefficient management and low incentives, coupled with floods, droughts and, in 1960, the withdrawal of all Soviet aid. The Cultural Revolution (1966-70) attempted to draw attention away from these disasters by increasing Mao's personal presence with the launch of his little red book of quotations, the purging of opponents and the launch of the Red Guard. Universities and schools were closed, intellectuals were killed or persecuted, publications ceased, temples and monasteries were ransacked and reminders of China's feudal and capitalist past were destroyed. The focus was broadened to cover all `counter-revolutionary organisations', and the People's Liberation Army (PLA) took over the offensive.

Beijing politics were divided between Zhou Enlai, Deng Xiaoping and the moderates on one side, and radicals and Maoists led by Mao's wife, Jiang Qing, on the other. The radicals gained the upper hand when Zhou died in 1976. Hua Guofeng, Mao's chosen successor, was made acting premier. Public anger at Jiang Qing and her clique culminated in a gathering of protesters in Tiananmen Square, and a brutal crackdown led to the disappearance of Deng, who was blamed for the `counter-revolutionary' gathering.

When Jiang Qing announced her opposition to Hua she was arrested, along with the three other leaders of her clique. There were celebrations throughout China when the news that the so-called Gang of Four had been brought to justice. Deng returned to public life in 1977, eventually forming a six-member Standing Committee of the CCP. The country was in obvious need of modernisation and ideological revitalisation.

With Deng at the helm, and the signing of the 1984 Sino-British Joint Declaration, China set a course towards economic reconstruction. Agricultural surpluses were permitted to be sold on the open market and Special Economic Zones were established near Hong Kong and Taiwan - with spectacularly successful results. Political reform, however, was almost nil. General dissatisfaction with the Party, soaring inflation and increased demands for democracy have led to widespread social unrest - epitomised by the demonstrations of 1989 that resulted in the bloody Tiananmen Square massacre.

Now that the British have finally handed back the keys to Hong Kong, China's `one country, two systems' plan shifts up a gear. With Deng dead and Jiang Zemin installed as leader, China is charting a new course. China watchers fear the country might break up because of sky-high inflation levels, official corruption, stalled economic growth and stagnant rural incomes. Hong Kong, say the cynics, will slide into economic obscurity as Shanghai and other mainland cities gain favour ahead of the legendary island. Radical change or slow collapse is certainly possible in Hong Kong, but it's more likely - and more Chinese - for both to somehow occur simultaneously.