How 2012 Changed China

By Benjamin Carlson

HONG KONG - In ways that China's leaders were probably not expecting, the Year of the Dragon lived up to its hype.

According to the Chinese zodiac, 2012 - as a dragon year - was supposed to be particularly lucky and momentous, charged with auspicious signs of change.

While the Chinese government may dispute that this year has been full of good luck, for China watchers, 2012 has certainly delivered. From the reverberating fall of Bo Xilai to the economic slowdown to the escape of blind legal activist Chen Guangcheng, this last year has been one of the most momentous in China's recent history.

Here, GlobalPost gives a review of the five biggest events of 2012 that changed China - and will continue to shape it into next year.

1) The fall of Bo Xilai

Perhaps the biggest story was the operatic ouster of one of the Communist Party's strongest and charismatic figures, Bo Xilai. Over the space of several months after his police chief fled to a US consulate in February, the Chongqing Party boss - long considered a front-runner for China's top rung of power - was sacked, dismissed from his positions, and charged with a laundry list of violations of party discipline, including "improper sexual relations with a number of women."

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Why does it matter? It revealed vividly that, despite the unified face it tries to show to the world, China's Communist Party is riven with factions. After a long struggle over Bo's fate, his dismissal continued to play out in behind-the-scenes negotiations over the once-a-decade power transition this fall. It was also a rare occasion when China's opaque political system was opened up to the outside world.

In 2013, the affaire Bo may finally put to rest the canard (long argued by Tom Friedman, among others) that China's one-party system is enviably and uniquely united in its rule, and therefore superior to the "messiness" of democracy.

2) The South China Sea heats up

One of the more concerning trends of the past 12 months has been the steady rise in tensions between China and her neighbors in territorial disputes over the South China Sea. In April, China and the Philippines got into a standoff over the Scarborough Shoal - a series of rocks used by fisherman - that led to an economically devastating ban on imports of bananas from the Philippines. A few months later, Japan and China came to a head over the Senkaku/Diaoyu islands, with protesters smashing Japanese cars and Japanese-owned businesses.

At stake are resources, including large fisheries and potentially huge troves of oil and natural gas. What's more, $1.2 trillion of US trade passes through the sea lanes, along with half of all global intercontinental trade. The rest of the world clearly has an interest in keeping the sea open. But what to do?

So far, the US has avoided getting involved beyond a few statements saying it would support its allies in the event of conflict. But as the disputes show no sign of cooling - Japan's new government is promising a more aggressive stance, and China has taken to flying over Japanese airspace - the South China Sea may be one of the main hotspots for Americans to watch in 2013.

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