China has a fundamental national interest in retaining Tibet [Images] as it is the Communist giant's "anchor" in the Himalayas, a leading US security thinktank has said.

"The Chinese see Tibet as a matter of fundamental national security, and they view pro-Tibetan agitation in the West as an attempt to strike at the heart of Chinese national security," the Stratfor said.

"The Chinese are therefore trapped. They are staging the Olympics [Images] in order to demonstrate Chinese cohesion and progress. But they must hold on to Tibet for national security reasons, and therefore their public relations strategy is
collapsing.

Neither India nor the US is particularly upset that the Europeans are thinking about cancelling attendance at various
ceremonies," it said.

According to Stratfor, China has few counter-moves to this pressure over Tibet.

"While China thus lacks politico-military options to counter the pressure, it also lacks economic options. It is highly dependent for its economic well-being on exports to the US and other countries; drawing money out of US financial
markets would require Beijing [Images] to put it somewhere else," it said, adding "that leaves the pressure on Tibet, and China is
struggling to contain it."

But the think tank said China will hold on to Tibet.

"The really interesting question is whether the stresses building up on China's central administration are beginning to
degrade its ability to control and manage events. The next step is to watch China trying to pick up the pieces on a series of administrative miscues. That will give us a sense of the state of Chinese affairs," it added.