updated 1:10 p.m. ET March 18, 2008

SHANGHAI, China - The troubled Chinese man, obsessed with his outstanding debts, boarded the tourist bus and opened his jacket to reveal explosives. In the only English he spoke that morning, he told the frightened Australian passengers, "I'm sorry."

Hours later, the assailant was shot dead by a police sniper, his blood spattering a hostage's jeans. Police jumped over her and shot him again to make sure he was dead.

The incident earlier this month in Xi'an, one of China's most popular tourist cities, was an embarrassment for China as it prepares for the global spotlight that comes with this summer's Olympic Games.

Because of China's tightly controlled political system, statistics that break down crime against foreigners were unavailable. But anecdotal evidence suggests foreigners are increasingly targeted, as a booming economy erodes old taboos and some Chinese grow bolder — or like the hostage-taker, more desperate.

In cosmopolitan Shanghai in recent months, a foreigner had a knife put to his throat and his money taken. Another was tricked into paying up to $1,000 for a $7 taxi ride. Four thugs surrounded an English boxing star, Ricky Hatton, and stole his $8,000 Rolex.

Shanghai and Beijing are still safer than most foreign cities of their size. Punishments for crimes against foreigners are heavier, police-linked neighborhood watch groups are highly vigilant, and Chinese can't own guns.

"China is of course one of the safest places in the world," Foreign Minister Yang Jiechi said at a recent news briefing when asked about foreigners' safety. "If you don't believe me, ask your ambassador, ask the U.S. ambassador, ask any ambassador from Western countries, do they feel it is safer in China or safer elsewhere?"

But the booming economy draws millions to China to work, study and travel, and criminals increasingly are defying a culture that has long considered foreigners inviolate.

The U.S. government now warns Americans against muggings, beatings and even carjackings, especially in the nightlife and shopping districts of large cities.

In the past year, Chinese media have reported incidents such as the robbery of three foreigners in Nanjing, the robbery at knifepoint of a foreigner in poor Guizhou Province and the kidnapping of a foreigner, who was released the next day, for a ransom of more than $40,000 in the rich southern city of Shenzhen. All the reports refer to "wai guo ren," or foreigners, without giving nationalities.

Still, the Ministry of Public Security reports that last year it counted 289,000 robberies and 171,000 bag-snatchings overall — a tiny number for a country of 1.3 billion people. It reported only that murder and kidnapping were down 10 percent and 1.5 percent respectively from the year before, without giving the number of cases. Nor did it detail statistics on crimes against foreigners.

When the Olympics begin in August and the world focuses on China, the nation's police will face the challenge of preventing crime without resorting to harsher methods than many countries would accept.

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It's not known whether the explosives in the tour bus could have detonated, but the mayor of Xi'an said using a sniper against the hostage-taker was "an appropriate way" to settle the incident and protect the Australians.

That the hostages were foreign travel agents looking into China tourism was no help to a country that already is second only to the U.S. in the size of its tourist economy. China had nearly 125 million visitor arrivals in 2006, the national tourist office said. A report released this month by the London-based World Travel and Tourism Council estimated tourism will bring China about $592 billion this year.

"There are more expatriates. There is also more money. These things lead to new pressures," said Robert Broadfoot, managing director of the Hong Kong-based Economic and Political Risk Consultancy.

And much of the crime against foreigners appears to involve scams against tourists.

Last week, Xinhua, the official news agency, reported the bust of a taxi gang in Shanghai that allegedly had scammed more than a dozen foreigners out of $7,000 in less than two months.

"The number of scams in China is humongous," said Philippe Tzou, a Belgian who works for a trade company in Shanghai and organizes the local chapter of Couchsurfing, a global network of budget travelers. He said some scam artists try to lure foreigners into karaoke clubs, where they can be billed about $425 an hour.

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Consulates warn foreigners to beware of Chinese who invite foreigners to a teahouse, ostensibly to practice their English, then present them with a huge bill and sometimes threaten violence.

Such crime is a byproduct of China's newly freewheeling economy and more mobile society. "The ability of control in China now is a lot less than it was," said Broadfoot.

But he added, "Gee, on the security side, I'd rather have the Olympics in Beijing than in L.A. Though both cities will get you with pollution."

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