By Chris Buckley
BEIJING, March 1 (Reuters) - China's rapid economic growth has diluted discontent at home and enhanced its influence abroad, but is also creating strains and anxieties that have been recently reinforced by jitters about the upheavals in the Middle East.
Here is a summary of key political risks in China:
REACTION TO MIDDLE EAST UPHEAVAL AND SUCCESSION POLITICS
The chances of mass unrest in China challenging Communist Party rule soon remain slim, despite official anxiety about reverberations from the unseating of authoritarian rulers across the Middle East.
The Chinese Communist Party maintains strict political and media controls to quash any organised dissent -- controls in many respects more pervasive and powerful than those in Egypt and other Middle Eastern states.
China's has also maintained fast economic growth -- 10.3 percent last year -- and promoted policies meant to ease grassroots discontent with inequality, expensive healthcare and confiscations of homes and farmland for redevelopment.
Calls on an overseas Chinese website for "Jasmine Revolution" gatherings in China inspired by the Middle Eastern demonstrations have been smothered by censorship and appear to have little organised support on the ground in China.
Recently, security police have also detained or placed under informal house arrest dozens of dissidents, human rights lawyers and activists, underscoring the Party's determination to stamp out any attempts to emulate the Middle Eastern protests.
The dominant policy issue immediately facing China then is not mass unrest, but rather how the Party leadership's fear of such risks could prompt outsized reactions, drawing criticism from abroad, and discourage the government from major policy shifts.
Premier Wen Jiabao has said the government must keep social stability firmly in mind in dealing with inflationary pressures and foreign demands to accelerate appreciation of the yuan currency.
The Chinese government's aversion to major policy reforms is likely to be reinforced by succession politics, which will encourage caution and waiting. Chinese President Hu Jintao and Premier Wen Jiabao are likely to give up their main Party posts in late 2012 and their state posts in early 2013.
As they and the emerging successor leadership led by Vice President Xi Jinping navigate this transition, stability will be paramount and the government will have little appetite for gambles at home or abroad.
Citizens who challenge the government are likely to face tighter restrictions, and foreign and domestic companies with products seen as potentially undermining controls are likely to face tighter scrutiny and restrictions. Recently, for example, access was blocked in China to LinkedIn, a social networking site tailored for professionals.
What to watch:
-- Signs that the overseas Internet calls for protests inspire gatherings of any size in China. This is very unlikely.
-- Chinese government efforts to stamp out any sources of protest, which could also affect companies, especially Internet and telecom ones.
-- A deepened aversion to policy innovations.
MANAGING THE PACE OF GROWTH AND PRICE RISES
Chinese policymakers have unleashed a stream of policies and orders seeking to subdue price rises while keeping economic growth aloft. So far they appear to be succeeding, but keeping the balance right is tricky, and missteps could bring a backlash from markets and the public.
Chinese inflation was lower than forecast in January at 4.9 percent, but price pressures remain strong enough to demand deeper tightening.
China raised interest rates on Feb. 8, the third rate increase since China began a monetary tightening cycle in earnest in October. Beijing has also imposed a slew of measures to target property prices that have stayed stubbornly high.
But new home prices climbed in January from a year earlier in 68 of the 70 major cities tracked by the National Bureau of Statistics, with 10 of them registering double-digit growth.
The risks are that inflationary expectations could come unhinged if Beijing is seen to be sitting on its hands over food and housing prices, which are big gripes among Chinese consumers.
The chances of these gripes coalescing into widespread unrest are slim, but Chinese policymakers are jumpy about even remote risks of protests that could challenge Communist Party rule.
Beijing's recent measures to contain food and property price rises show officials are aware of popular frustration and ready to take serious action. Inflation worries are also likely to bolster hawkish policymakers who want more monetary tightening.
Tipping too far towards tightening could hurt growth and job creation.
What to watch:
-- Hints from officials or state media that Beijing might step up its campaign to control price pressures, applying more administrative measures to reinforce monetary tightening.
-- Government data on everything from housing to factory output and prices, although sometimes flawed, offers the best indication of underlying economic trends.
-- Signs that popular grumbling about prices is becoming more persistent discontent that could prompt more high-profile cooling steps by the government.
CURRENCY AND TRADE DISPUTES WITH THE UNITED STATES
The United States and China have been wrestling over the level of the yuan. The worst of the recent political tensions over the issue may have receded after President Hu Jintao's January summit with U.S. President Barack Obama.
Still, tensions are sure to persist. Last year the U.S. House of Representatives passed a bill that treats the yuan as an export subsidy and allows the U.S. Commerce Department to impose countervailing duties on Chinese products. The Senate failed to take up the measure, but lawmakers have said they plan to reintroduce the legislation.
The bill faces tougher going now that Republicans, generally less keen than Democrats for such action, have gained control of the House, but the issue will remain a thorn in bilateral relations. Obama said he told Hu that China's currency is undervalued and should be increasingly driven by markets.
What to watch:
-- The speed of the yuan's climb, or lack thereof.
-- Rhetoric from Washington and Beijing. Both sides want to avoid any serious dispute but also to protect domestic industry and maintain popular support at home.
-- The debate in China. A top-down political system limits outright clashes between officials with rival views on the currency, but tracking public comments can provide useful hints on the direction of policy and there have been signs of divergence among officials.
LABOUR UNREST AND SOCIAL STABILITY
Expectations among some 153 million rural migrant workers for higher wages and better conditions are raising pressure on employers, while there are also signs of tightening labour supply, which will strengthen workers' bargaining power.
This period after the Lunar New Year holiday is when many workers look for new jobs, and will be a telling time for worker wage expectations and employment opportunities.
The wage demands of migrant workers have partly chimed with one of Beijing's main economic agendas -- trying to boost domestic consumption and narrow the yawning rich-poor gap by lifting the share of national income taken home by workers.
But the government does not want workers' expectations to scare off manufacturers on narrow margins, worried about jolts from price and wage rises. Nor does it want periodic worker unrest to crystallise into organised opposition outside the control of Party-run union organisations averse to confrontation.
What to watch:
-- Signs that the post-Lunar New Year season has brought significantly higher wage expectations from migrant workers.
-- Indications that rising wage expectations, on top of