ROBERT SIEGEL, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

MICHELE NORRIS, host:

And I'm Michele Norris.

This weekend in China, the gay community held its largest pride festival ever. Homosexuality has become more accepted in China. Still, government interference in the festival proves there are still limits to official tolerance of gays.

As NPR's Louisa Lim reports, one organizer summed up the festival saying it had one foot firmly inside the closet.

LOUISA LIM: If any reminders were needed of just how far China's come, a panel on gay cruising spots in Shanghai provided just that. Men used to gather at one newspaper board, a panelist told the audience, where you'd pretend to read the news. Your hands would be trembling as you edge closer together. You'd ask, what's in the news today? If the other man had no idea, you'd know he was gay.

It's just 12 years since China decriminalized gay sex and the concept of gay pride is so new that even panelist Gao Yanning isn't entirely sure about it. He teaches China's first course on homosexuality at Fudan University.

Professor GAO YANNING (Fudan University): I'm not sure whether the meaning of this pride…

LIM: Of gay pride?

Prof. YANNING: Uh-huh. Is the same meaning? We don't say that. But I think that's a good word. We can express we are gay and lesbian in this way, in this positive way, right?

LIM: Even at this panel, plainclothes police were videotaping the proceedings. Two days later, the China Daily called the festival a good showcase of China's social progress - an event of profound significance. Apparently, no one told this to inspectors from Shanghai Administration of Industry and Commerce. That very day, they began closing down events, saying the venues didn't hold the right licenses.

Organizer Hannah Miller, who's American, says the mixed messages were bewildering.

Ms. HANNAH MILLER: That was very frustrating. So we were confused but we had just gotten the praise from the government and we just didn't understand. So we had to cancel three events. We were worried about today. Honestly, we were a little worried that we wouldn't get to go on. But it was okay and we got through it.

(Soundbite of song, "You Give Me Fever")

COCOLICIOUS (Singer): (Singing) …you give me fever.

LIM: By Saturday, a daylong party was in full swing. The police had visited just once to advise organizers to keep the numbers down. On stage, one of China's top jazz singers was in drag as Cocolicious, wearing a white silk dress and lots of bling, and dueting with a woman in a snazzy black tux and pink trilby.

COCOLICIOUS: This is quite important, not only for me, but for China, for the whole world. It is a great statement of how China's gay scene is ballooning right now.

LIM: For Cocolicious and a generation of younger gays, sexuality has clearly nothing to do with the state.

COCOLICIOUS: I love my country. I would do anything to protect my country, as well, so I don't think there's anything will get me in trouble. If I dress up like a girl once in a while and being homosexuality, I think that's something my personal.

Unidentified Woman: Okay, we've got Fiona for 300. Ladies, come on.

LIM: As people are auctioned for charity, the crowd is in great spirits. But underlying that is caution born of past disappointments. Several interviewees requested their jobs aren't mentioned for fear of retribution.

Yu Tian is celebrating, his face painted with a rainbow. He's happy, but says what we're seeing isn't true openness.

Mr. YU TIAN: (Through Translator) I think this gay pride festival is allowed because it's organized by foreigners. When Chinese people try to do things like this, they often get closed down. In Beijing, three times the queer film festival was closed on its opening day.

LIM: But today, however, the mood is one of celebration. But China's gay men and women know they have battles ahead. One of the earliest could be against the Internet filtering software, which must be provided with all new computers from the July 1st. This blocks access to any sites using the word homosexual -at a stroke blacklisting those gay community Web sites that helped make Shanghai gay pride week a reality.

Louisa Lim, NPR News, Shanghai.

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