Last month, in a unique display of direct democracy, Tibetans from all over the world gathered in the Indian hill town of Dharamsala, home of the Dalai Lama and many other exiled Tibetans, to debate Tibet's future. For days, monks, businessmen, students, and many other Tibetans discussed how Tibet should respond to Chinese repression--whether it should continue an ongoing dialogue with Beijing about a future that would mean autonomy under Chinese rule, or abandon dialogue and return to a hard-core, separatist push for independence.

But the dialogue was somewhat off point. In reality, Tibet is threatened not as much by Chinese repression--though that surely exists--but by a more insidious danger: Chinese co-option. Over the past decade, as China has lavished government cash on Tibet, it has created a Tibetan elite in the province that is becoming increasingly Sinicized, and, with that, less willing to lay their business and lives on the line to push for Tibetan autonomy or independence. And as China’s influence grows, the exiles in Dharamsala--who for decades have served as the main face to the world of Tibetan opposition--can do less and less about it.

In 1959, Beijing took full total control of Tibet, and the Dalai Lama fled to India, along with much of Tibet’s religious and social elite. For decades, Chinese rule was unremittingly harsh. During the Cultural Revolution, China destroyed the vast majority of monasteries in Tibet; when I visited Tibet in 2006, monks could still point out to me places where Chinese soldiers blasted the monasteries with guns and artillery. Even after the Cultural Revolution, when pressure eased in other parts of China, Beijing kept an iron hand in Tibet. Though Chinese officials allow a higher degree of religious freedom in other parts of the country, they still round up, imprison, and torture Tibetan monks and nuns who express any political sentiments. In just the past six months, according to a report by the International Campaign for Tibet, the security forces have detained “hundreds of Tibetans, including monks, nuns and schoolchildren, and [created] a stepped-up military presence amounting to de facto martial law in Tibetan areas.”

Today, however, Beijing has augmented this repression with a more sophisticated strategy toward Tibet. To be sure, China still cracks down, as it did after large-scale protests last spring, when it declared martial law and reportedly threw hundreds of Tibetans jail. But Beijing now hands out carrots, too. "China's central government has been intensifying its program of support for Tibet," noted China’s state-owned CCTV International earlier this year. "These projects aim to speed up infrastructure development and bring more benefits to Tibet's farmers and herdsmen." After a 2000 visit to the region, China’s former vice-premier Li Lanqing echoed this sentiment, as paraphrased by the Communist-owned People’s Daily Online: "China's strategy on large-scale development of the western region will bring Tibet into a new economic development era."

Indeed, the national government spends more state money on the Tibet Autonomous Region, the province that makes up much of historic Tibet, than any other province in China. It shows. Outside of the Barkhor, the old Tibetan area of town, I found the city looked much like other provincial capitals, with its rows of hotpot restaurants catering to Sichuan migrants and squat office towers housing neon-lit Chinese shopping malls selling mobile phones, jewelry, and other expensive items.

The government is spending the money strategically. Much of it has gone to ethnic Chinese, who have migrated to Tibet in search of jobs building new roads, office towers, and the high-elevation railway linking the region to the rest of China. Though Beijing usually refuses to admit this ethnic strategy, Chinese state officials have actually reported that Lhasa, heart of Tibetan culture, is no longer a majority Tibetan city.

A sizable portion of the government money filters into the hands of Tibetans, too. By working with the Chinese authorities, middle class Tibetans in Lhasa who speak some Chinese are able to get good jobs with the provincial government or to start small companies favored by Chinese officials. "Everyone in Lhasa, they want to get their sons some kind of state job," one Tibetan acquaintance told me. “That’s the ultimate goal, because the state is still the major employer."

Historically, the lack of economic opportunities had stoked the anti-China sentiments of many Tibetans, and given them little incentive to support the government. But these new Tibetan elites are realizing that trading on their Chinese connections can make them rich--rich enough to make some of them reluctant to take strong political stances. When I visited Lhasa, I traveled around town with a slick young Tibetan businessman who eagerly showed me his new DVD player and his piles of pirated DVDs of the latest American films. He’d made his money, I learned, by developing close relations with key Chinese officials, and then built a successful business of restaurants and hotels. Though members of his family expressed sharp anti-China views, he declined to say anything negative to me, explaining that unrest was bad for business.

"More people will wind up like him," another Tibetan friend of mine, less favorably inclined toward China, told me. "If you want to get a government job, or do business in Lhasa, you know you can’t be seen as political at all. You have to keep quiet." As a result, he said, though there are still many Tibetans frustrated with Chinese rule, they are primarily those who do not speak Chinese, wind up without jobs, and become more and more alienated--alienation that leads to protests like last spring. But Tibetan elites who’ve prospered under Chinese rule, he said--in a point echoed by many I interviewed in Lhasa--would be more reluctant to join any such future protests.

These developments have led the Tibetan exile community, centered in Dharamsala but spread all over the world, to be more and more cut off from its homeland, and less influential over what happens there. In Dharamsala, a second generation of Tibetans has grown up in exile, never having seen the fabled Tibet. Most exiles do not speak Chinese, making it hard for them to understand China’s strategies toward Tibet--a failing that has hurt the exiles badly in their negotiations with Beijing. And, since many older exiles have not been to China in decades, it is difficult for many to imagine a strategy to counter the wealth and glitz China has created, which lures some Tibetans. "I don’t think people here really have any idea what China today is like," said Lobsang Wangyal, a Tibetan journalist in Dharamsala.

As a result, the exiles have consistently underestimated their Chinese counterparts in the ongoing Tibet-China dialogue. Though Tibetan exiles expressed hope to me that the dialogue would lead to a letup in Chinese repression in the province, in reality nothing of the sort has happened. Instead, Beijing has used the dialogue to fend off international criticism about its Tibet policies, while essentially stonewalling any real change.

For now, the exiles still have a trump card that makes them relevant to people inside Tibet: The Dalai Lama. Though he also has not stepped foot on Tibetan soil in decades, most Tibetans still venerate this great leader, and look to him for cues. In addition, the Dalai Lama’s mere presence serves as a foundation of Tibetan culture; as long as he lives, and Tibetans can follow him, knowing they are doing so against Beijing’s wishes, they are quietly resisting co-option. When I traveled through Tibet, I found monks and laypeople eager to show me photos of the Dalai Lama hidden behind walls or other decorations.

But even a living god will die, and though healthy, the Dalai Lama is now in his 70s. When he passes, it will be more than a decade before his reincarnation, found as a boy, is old enough to make an impact on the world stage. By then, there may be nothing Tibetan left in Lhasa at all.

Joshua Kurlantzick is a special correspondent for The New Republic.

By Joshua Kurlantzick