-- Mao Yushi, an elderly retired economist, has started his own charitable foundation, with gifts from some of the government and Communist Party officials he helped train over the years. He uses it to finance microcredit -- loans of a few hundred dollars or less -- to villagers who want to start their own businesses and to train several hundred young women a year from rural areas so they can get jobs as hotel housekeepers in the burgeoning cities.

That is Mao's small personal contribution to solving a problem he says threatens all the economic progress that surrounds him here in the capital. "China is splitting into two countries," he told me and Philip Pan, The Post's Beijing correspondent. "The cities are developing" under the policies of market capitalism that have been adopted by China's communist rulers. "But the countryside is unchanged or even worse." Ambitious young people leave for the cities, if they can, to pursue education or careers. Those left behind are "very poor, ill schooled and often preyed upon by corrupt local officials," who dun them for taxes that really amount to bribes.

If the hope of democracy lies in the growing urban middle class, Mao says, the danger of a backlash stems from the dead weight of the two-thirds of the population still stuck in the rural past. "There are protests every day," he says, but they could mushroom if the economic growth of the past decade were to turn into a bust -- a threat very much on the minds of China's rulers.

The central government is trying to slow the double-digit growth of the past few years and bring it to a "soft landing" before what some see as a "bubble" economy, fueled by foreign investment and a huge construction boom, explodes. But it is a struggle. A delegation of conservative economists from the American Enterprise Institute who recently visited here was questioned closely by communist officials who wanted to know, "How the hell do you control your states? We cannot rein in what the provinces are spending."

The roaring economy is depleting China's resources -- and threatening worldwide inflation in oil, steel and other commodities. Xiang Huaicheng, a senior party official and former finance minister, said the long-term threats to China's future lie in the shortage of energy, the growing dependence on imports of such basics as steel, copper, zinc, etc., and the pollution that clouds the air and spoils the streams.

Equally evident to officials are the social strains created by this high-speed economic revolution. Xiang's current assignment is to expand a social security system that now covers only a fraction of urban workers and almost no one in rural China, and to do it at a time when improving life expectancy, combined with the one-child policy, has given China a rapidly aging population.

The family structure that has been the linchpin of Chinese society for centuries is under severe stress. A recent newspaper survey found two-thirds of urban youngsters are being raised by their grandparents because both parents work, and reported frequent arguments between the two adult generations on child-rearing practices.

The lead story in the Shanghai Daily on June 3 headlined a national survey that "showed about 20 percent of the middle and primary school children suffer problems ranging from unruliness to excessive drinking, teenage pregnancy and suicide. The moral problems of China's 367 million under-18s, including growing juvenile crime, have become a focal point for Chinese leaders."

With all this going on, those leaders do not need -- and say they do not want -- any external crises. That is why, they say, they have drawn a hard line against any dramatic steps toward democratic elections in Hong Kong. And it is why they talk constantly with visitors about the "threat" of a move toward independence by Taiwan's President Chen Shui-bian. China has declared it would oppose any such move "at any cost," and official U.S. policy calls for maintaining the status quo in the Taiwan Strait.

But Chen's stated goal is independence for the island, and the United States is committed by treaty to protect Taiwan from military action by China.

A Taiwanese professor I met in Shanghai said he is convinced that America "would not sacrifice one soldier for Taiwan's independence," but, he added, "90 percent of the Taiwanese believe the Americans would fight, and that encourages Chen and other independence advocates."

The Taiwan issue has almost disappeared from domestic U.S. politics, but it is dead-serious business here. And conceivably the U.S. commitment could be put to the test during the next presidential term.