It was a rude shock for many in the West this past April when tens of thousands of anti-Japanese demonstrators took to the streets of Shanghai and dozens of other Chinese cities for several days of violent protests. Shouting anti-Japanese slogans, they smashed the windows of Japanese stores and restaurants, overturned Japanese cars, and burned Japanese flags and photos of Japanese prime minister Junichiro Koizumi. The demonstrators were reacting to a seemingly mundane event, Koizumi’s visit to a Tokyo shrine commemorating Japanese war dead. But it did not escape notice in China that the shrine honored Japanese war criminals as well as ordinary soldiers. The memory of atrocities such as the Rape of Nanking in 1937, when Japanese soldiers killed hundreds of thousands of Chinese civilians, is vivid still in China, and the publication of Japanese history textbooks minimizing these war crimes added fuel to the fire.

In Japan and the West, the nationalist flare-up fed anxiety about the rise of a more aggressive China. Critics suggested that the government itself had cynically manufactured the protests. It is true that, with the decline of communist ideology as a unifying force during the 1990s, Beijing has routinely exploited nationalist feelings to divert attention from domestic problems and to gain leverage in the diplomatic world, among other purposes. The growing self-confidence born of economic success, along with a deep sense of historical grievance against Japan and the Western powers, has made nationalism a potent force. But in April, officials in the capital city watched the demonstrations with genuine alarm. They knew that Chinese nationalism is a double-edged sword that could as easily turn against the government as it did against the Japanese, threatening the very existence of the Communist regime. Anger at the Japanese could lead to open criticism of Beijing’s foreign policy—which is unforgivably soft in the eyes of most liberal nationalists—and could ignite a host of popular grievances about corruption, economic inequality, and other troubles.

President Hu Jintao and his government were particularly concerned about an Internet-based campaign to mount much bigger demonstrations on the anniversary of the May Fourth Movement—a patriotic outburst that erupted after World War I when the Treaty of Versailles gave Japan control of a slice of Chinese territory and that has become a symbol of social reform, individual emancipation, and resistance to foreign aggression. Taking advantage of its control of telecommunications, the government broadcast a blizzard of text messages to mobile phone users warning against “spreading rumors, believing rumors, or joining illegal demonstrations.” Police in China’s major cities were put on full alert. The demonstrations were quashed.

In the West, Chinese nationalism often appears to be a single, worrisome phenomenon. But as April’s events suggest, there is more than one variety of Chinese nationalism—and more than one path that it may follow in the future. The demonstrations revealed the face of liberal nationalism, whose partisans among students and intellectuals advocate a China that is more democratic at home but more assertive abroad.

Watching from their offices in Beijing, the officials of Hu’s government exemplified the tradition of state nationalism, which has roots deep in the imperial past but today closely identifies the Chinese nation with the Communist state. The Chinese government officially expresses nationalist sentiment as aigu, which in Chinese means “loving the state,” or aiguozhuyi, which means “love and support for China,” a China that is always indistinguishable from the Com­munist state. State nationalism demands that citizens subordinate their individual interests to those of the state. And in its relations with foreign powers, China’s current rulers believe that the state must prudently balance nationalist imperatives against other objectives, particularly the overriding goal of economic modernization.

In a campaign of “patriotic education” after the 1989 Tiananmen Square debacle, Beijing declared that China was not yet ready for Western-style democracy. Continued one-party rule would maintain the political stability needed for rapid economic development. Amid the anti-Western backlash in reaction to the West’s post-Tiananmen sanctions against China, the regime was able to present itself as the defender of China’s pride and national interests by preventing Tai­wan’s independence, securing entry into the World Trade Organization, and, in a victory that swelled many Chinese hearts, bringing the 2008 Olympics to Beijing.

Yet there are limits to how far the regime will go in the name of nationalist pride and principle. Time and again in recent years, Beijing has permitted, and sometimes encouraged, liberal nationalists to take their militant views to the streets, only to call a halt when a threat to China’s long-term goal of economic modernization appeared. When U.S. warplanes accidentally bombed the Chinese embassy in Belgrade in 1999, demonstrations swept China for two days, until then–vice president Hu, perceiving a threat to Sino-American relations (and perhaps to the Beijing regime itself), went on national television to stop them. The People’s Daily cautioned that Western countries were issuing advisories against travel to China, threatening tourism and trade. Two years later, when a U.S. spy plane and a Chinese fighter collided over the South China Sea, Beijing accepted something less than the full formal apology it had demanded, opting once again to smooth relations with an important partner in trade and investment rather than stand on a point of national pride.

As China’s economic and military power grows in the decades ahead, the tension between the pragmatic state nationalism of the Beijing government and the liberal nationalism of the streets will largely determine what kind of face China shows to the world.

Modern Chinese nationalism was born in the wake of China’s shattering defeat by Britain in the Opium War of 1840–42, which led to the disintegration of imperial China and the loss of national sovereignty as Western powers carved out zones of influence on the mainland. From Sun Yat-sen in the early 20th century to Hu Jintao today, all of China’s leaders have been committed to the quest to blot out China’s humiliation at the hands of imperialists and to recapture the greatness of the past. They have seen China’s decline as “a historical mistake, which they should correct,” as Chinese scholar Yan Xuetong observes. Of all the slogans heard by the Chinese people in more than a century of struggle, zhenxing zhonghua (rejuvenation of China) has had by far the most powerful appeal.

China’s first nationalists were ethnic nationalists. In the wake of the Opium War and other encounters with the West, as well as the disastrous defeat in the Sino-Japanese War of 1894–95, the search for national rebirth inspired Sun Yat-sen and other leaders from the ethnic Han majority to seek the overthrow of the long-ruling minority Manchu dynasty and to establish an ethnic state. But after the dynasty’s collapse in 1911, Sun recognized that a more inclusive nationalism would be a wiser course for leaders who hoped to rule not only the Han areas along China’s coast but Tibet, Mongolia, and Xin­jiang. Under Sun, the Chin­ese nation was redefined as a multiethnic political community, with the state as the great object of loyalty.

Today ethnic nationalism remains very much alive on China’s frontiers. Nourished by a sense of grievance over the failure to share the fruits of China’s economic boom—incomes in Beijing were three times larger than those in largely Muslim Xinjiang by the late 1990s—and by the global changes that have fueled nationalism and ethnic separatism everywhere, China’s ethnic nationalism is a source of great anxiety in Beijing.

Even as officially sanctioned ethnic nationalism vanished in a puff of smoke during the early 20th century, a new liberal nationalism was being born among reformers who looked to the West for political and social models. Then, as now, liberal nationalism was a movement chiefly among intellectuals—though in China, the intellectual class includes virtually everyone with a high school education (currently about a quarter of the population).

It is a distinctively Chinese liberalism. One of the movement’s seminal figures, Liang Qichao (1873–1929), wrote that defeat in the Sino-Japanese War woke the Chinese people “from the dream of 4,000 years.” Well read and widely traveled in Japan and the West, Liang propounded a new liberalism that elevated individual rights but still put the nation first. At a time of national peril, he argued, citizens should put the survival of the nation before their personal interests. Devotion to the nation rather than Western-style individual rights is also the chief underpinning of the liberal nationalists’ commitment to democracy. They believe that citizens have the right and duty to hold the state accountable for the defense of China’s national interests. In 1999, for example, Wang Xiaodong, a leading liberal nationalist editor, denounced China’s state-controlled news media for failing to report that Beijing had agreed to pay the United States $2.87 million for damage to U.S. diplomatic properties in China during anti-American demonstrations. China needed news media that told the truth and a government that sought the consent of the people before making such concessions, Wang told The Far Eastern Economic Review. The Chinese people, he declared, should have the right to vote out political leaders who inadequately defend their national interests.

Just as today’s liberal nationalists criticize the Communist regime for violating individual freedoms and failing to stand up to the imperialist powers, so their predecessors criticized the Kuomintang regime of 1928–49. Some allied themselves with the Com­munist Party. But when Chairman Mao Ze­dong’s Hundred Flowers Cam­paign encouraged many of these nationalists to criticize openly the Com­munists’ monopoly of political power in 1957, they were brutally purged, and some were jailed or sent to labor camps.

Liberal nationalism did not re-emerge until the 1980s, when Deng Xiaoping’s call for “thought liberation” and post-Mao reform created new opportunities. Fear­ful of criticizing the Communist state directly, many liberal nationalists instead blamed China’s “authoritarian culture” for the lack of modernization in China. They called for a rejection of Chinese tradition and an embrace of Western culture and models of development—an agenda that was forcefully expressed in 1988 in a six-part documentary television series, Heshang (River Elegy), that electrified China. The series made no direct attack on the Communist Party, but it highlighted the huge gap between the ideal world constructed by party ideology and the cruel reality of the People’s Republic. (The point was sufficiently clear that Beijing prohibited a third broadcast of the series.) It portrayed China as a declining ancient civilization whose modern history compared very unfavorably with Western achievements in the industrial and information revolutions. Using powerful imagery of the Yellow River’s muddy torrents rushing into the serene blue of the ocean, Heshang suggested that China must look for its fulfillment toward the vast expanse of the Pacific and beyond.

Even in 1988, however, the liberal nationalists’ admiration for the West’s success was joined to a view of the West as hostile and aggressive, and within a few years mainstream Chinese intellectual discourse had shifted drastically. The liberal nationalists were angered by Western sanctions and rhetoric about human rights violations after Tiananmen Square. And they were shocked by political scientist Samuel Huntington’s prediction of a “clash of civilizations” in a 1993 Foreign Affairs article and by open calls in the West for the containment of China, such as Charles Krauthammer’s in a 1995 Time column comparing China with pre–World War II Germany. The instant popularity in the mid-1990s of the “say no” books, such as China Can Say No and China Still Can Say No, reflected the change in sentiment. The books’ simple message was that Western nations, particularly the United States, were plotting against China in a new cold war, and that China must stand up to them. The authors of China Can Say No confessed that as students they themselves had craved Western culture and products, until the unconscionable rejection of Beijing’s bid to host the 2000 Olympics and the U.S. Navy’s show of force in the Taiwan Strait early in 1996 forced them to rethink their hopes and dreams. Before the Chinese could say no to the Americans, the books warned, they first had to say no to themselves, to their lack of nationalist spirit and to their blind worship of the United States.

China’s liberal and state nationalists are united in pursuing qiangguomeng, the dream of a strong China, but both camps are also beset by the same set of historically rooted divisions over how to achieve that goal. There are nativists who see the subversion of indigenous Chinese virtues by foreign imperialists as the root of China’s weakness. They call for a return to Chinese tradition and self-reliance and take a confrontational stance toward the outside world, as Mao Zedong did during the Cultural Revolution of the 1960s. Anti-traditionalists regard Chinese tradition as the source of the nation’s weakness, and they favor the adoption of foreign cultures and models. Although their militant approach to the wider world echoes Chinese nativism, today’s liberal nationalists are antitraditionalist in their approach to most issues.

The pragmatists who have steered China’s foreign policy since Deng Xiaoping came to power in the late 1970s seek to adapt to the changing world, but they have very few commitments to particular ideological principles. As Deng said, “It doesn’t matter whether a cat is black or white as long as it can catch rats.” Economic modernization is their overarching objective—because economic prosperity is both a means for the Communist Party to stay in power and the foundation of China’s national aspirations to greatness. China’s leaders, therefore, have tried to avoid confrontation with the United States and other Western powers, emphasizing peace and development as China’s major international goals. They are assertive in defending China’s national interests, such as reunification with Taiwan, but they are not antiforeign.

Though they are increasingly constrained by nationalist sentiment and hampered by the absence of a charismatic leader such as Mao Zedong or Deng Xiaoping, the pragmatists have kept China on a predictable course. Talking tough but acting prudently is the pragmatists’ way. As long as they are reasonably secure in Beijing, it will likely continue to be China’s way as well.