Joan Smith: China will come off worst in a Nobel prize fight

What most people remember about the 2008 Beijing Olympic games is the spectacular opening ceremony. What I remember is the craven refusal of most world leaders to go along with the boycott of the ceremony proposed, and then abandoned, by the French president, Nicolas Sarkozy.

In the event, Sarkozy swallowed his objections to China's dreadful human rights record, as did George Bush and the leaders of many other democratic countries. Gordon Brown, Angela Merkel and Canada's Stephen Harper stayed away, but the acceptance list was sufficiently star-studded to fulfil the Chinese government's ambition of flaunting their country's importance on the world stage.

Now the Chinese authorities have embarked on a diametrically opposite course, trying to wreck next month's Nobel Peace Prize ceremony in Oslo. They're furious that this year's prize has been awarded to the jailed Chinese dissident Liu Xiaobo, and they've launched a boycott of the event which has been joined by Russia, Morocco, Iraq and Kazakhstan. The Chinese government will not allow Mr Liu to collect his prize. His wife, Liu Xia, is under house arrest, and his three brothers are not permitted to leave the country.

The Nobel committee has responded by threatening to withhold the prize for the first time since 1936, when the Nazis prevented a German journalist, Carl von Ossietzky, from travelling to Oslo. Twenty-first century China isn't Hitler's Germany, but it is an authoritarian state that denies the most basic human rights to its own citizens.

Its international influence is pretty dire as well: China is an ally of President Omar al-Bashir of Sudan, who has the distinction of being the only head of state who is also an indicted war criminal, and of the Burmese generals who loathe and fear their own Nobel laureate, the newly released opposition leader Aung San Suu Kyi.

The row over Mr Liu is significant because this is a rare occasion when the Chinese authorities are dealing with people who aren't worried about giving offence or damaging trade. Heated discussions about what David Cameron should say on human rights during an official visit to China earlier this month demonstrated the dilemma facing democratic leaders.

What's essential now is that the EU agrees a common position on human rights in China; the Chinese government is keen to engage with the outside world in narrow mercantilist terms, but takes instant offence when foreigners suggest it should treat its own citizens with respect and humanity. Even so, China needs our markets. They sold goods worth almost £184bn to EU countries last year, compared with the £70bn we sold to them . That means democratic countries should resist the temptation to mute criticism of flagrant human rights abuses.

Mr Liu is said to have refused an offer to go into exile in return for a signed confession of guilt and his relatives have been harassed and placed under surveillance, a reminder of the total control China enjoys over its citizens. The Chinese authorities have returned all correspondence from the Nobel committee unopened, but a lot more is at stake than the Chinese ambassador to Norway looking like a party-pooper.

If the Peace Prize ceremony is called off for the first time in more than 70 years, we'll see what the Chinese government is really like: petulant, irascible and a very bad loser.