Acentury has gone by since the 'Hundred Days Reform' marked the beginning of China's intermittent 'reform and opening up'. The spot where in September 1898 the Empress Dowager Cixi had the heads of six bright young reformers removed was bulldozed over this year. It was sad to see the old courtyard houses where the reformers lived and debated knocked down by a wrecker's ball for developers anxious to put through a new road and throw up more supermarkets. Yet few tears were shed; the anniversary which was commemorated was the 20 years since Deng Xiaoping launched his programme of reform. With new buildings going up all around, Beijing's polluted air has seemed thick with the dust of progress. Many Western leaders have come and gone speaking confidently of the great changes afoot. President Clinton returned convinced he had been in the presence of a visionary leader after he spoke directly to the Chinese nation and went head to head with Jiang Zemin on human rights and Tibet. Zhu Rongji became Prime Minister in March resolutely promising a do-or-die programme of radical reforms as if he were a brave scholar advising the Emperor Guangxu, and not a top Communist Party leader. Yet the end of the year sees the Chinese state looking much as it always has. Those advocating democracy are being jailed, ready to be traded in when it is time for the next US president's visit. China's last reformist Prime Minister, Zhao Ziyang is still under house arrest in a courtyard house less than two kilometres from the Forbidden City, where Emperor Guangxu was kept after he was jailed by the conservative 'iron hats'. Despite the hopes of a Beijing Spring, the party-state looks as all-powerful as it has always done and one searches hard to identify a single organisation which is not under its direct control. The head of the secret police-security apparatus, Wei Jianxin, was re-elected unopposed as the head of the All China Federation of Trade Unions as millions of workers in state-owned factories had their iron rice bowls smashed. Mr Zhu's radical reforms increasingly seem to be about creating fresh efforts to find ways of keeping state industries afloat, no matter what the cost. Many believe privatisation is taking place ineluctably although Mr Zhu has been trying every trick in the book to ensure the party maintains control of the 'commanding heights' of the economy. At home the banks are issuing new loans and subsidies, while abroad the state is hoping to raise more money by issuing a HK$7.74 billion dollar bond issue. Mr Zhu had earlier raised huge sums to turn around the enterprises issuing shares on the domestic stock markets and in Hong Kong. This was made more difficult this year, as the supply of fresh capital has dried up, shares have fallen and the majority of state enterprises have fallen further into debt. The state put ceilings on the prices for several dozen key products and kept out imports by a strong anti-smuggling campaign. As exports slumped, Mr Zhu began placing more and more hopes on the peasantry, hoping that if more money is pumped into the rural economy demand will perk up and absorb the vast surplus of goods being warehoused. Yet rural incomes have been hard hit as the state closes down rural enterprises, such as coal-mines or paper mills. Fewer jobs are being created in rural enterprises and many cities are trying to squeeze out migrant workers to create jobs for laid-off or unpaid workers who number in the tens of millions. The still declining fortunes of the state sector are hampering efforts to sell off state housing and Mr Zhu's other ambitions - to boost education spending and cut the drain on the exchequer by halving the state bureaucracy are having mixed results. Education spending has not risen and many university graduates, who are being asked to pay for their education, are not finding it easy to find new jobs. In the ministries, too many officials are staying on the state payroll by attending university refresher courses or obtaining scholarships to party schools. In fact, it is likely that more people are being added to the payroll. Half a million troops are being demobilised who seem destined to be used to swell the still-expanding security apparatus. By the end of next year the Peoples' Armed Police will grown from one million in the late 1980s to at least two million while the number of regular police under the Public Security Ministry may also soon number two million. Recorded crime has more than doubled in 10 years, with at least a million cases going to court a year. Criminal cases which merit a trial almost invariably entail a minimum 10-year prison sentence leading to the burden of a growing prison population. Like the 20,000 former defence factories, many of these used to make money in the 1980s but in the past few years they have no longer obtained subsidised raw materials and have had to sell their products in a crowded and competitive market. This year Mr Jiang is trying for the second time to divest the army and security apparatus of the revenues from more recent and more lucrative investments in real estate and service industries. By the end of the year, these are all to be transferred into civilian hands. The strain on state expenditure is great, but it is insignificant when set beside the importance of maintaining high levels of confidence in the economy and political stability. Confidence in the Chinese economy and the competence of the Chinese leadership has grown steadily all year even in spite of the Asian economic crisis. For Mr Jiang and Mr Zhu the year has been marked by a succession of diplomatic triumphs. There have been high-level visits galore. Statesmen have showered China with praise and reduced criticism on human rights to the faintest whisper. The rest of the world has lavished praise for China's resolution in avoiding devaluation of its currency, its determination to avoid financial disaster by shutting down rotten institutions such as GITIC, and its ability to keep up high levels of growth. Foreign investment is almost as high as last year, and whereas China's exports may have slipped a little its visible trade surplus is large, especially with the United States. Even those economic experts who do not believe that China's economic growth rate is anywhere near the 7-8 per cent range that Beijing claims, would not place it in the same basket with Thailand, Indonesia, South Korea or Russia. The message of China's leaders that China is different and must be allowed to go its own way is gaining increasing currency around the world. The vastness of China, the unrestricted power of the state and the party, the lack of any opposition or dissent, are now some of the very things which inspire economic confidence in China.