BOB ABERNETHY: In China, parades and fireworks are now marking the 50th anniversary of the Communist takeover. China is officially atheist, but proclaims to the outside world that Chinese people are free to practice the religion of their choice. But that's not really true. In recent weeks, more than 30 Protestant and Catholic leaders have been arrested, and regarding Christians, freedom depends on whether a believer belongs to an official or an underground church. Fred de Sam Lazaro reports from Shanghai.

FRED DE SAM LAZARO: Nowhere does modern China look more modern than in Shanghai, a city quickly being restored to its onetime status as an economic nerve center. But amid the frenzied development, Shanghai's bulldozers have spared houses of worship, very deliberately, according to China historian Dr. Richard Bohr.

Dr. RICHARD BOHR (China Historian): For much of the outside world, the right to worship is terribly important; it's a basic right. So of course the Chinese government wants the world to see those Chinese who wish to worship in a public setting. It wants to showcase that public setting.

LAZARO: And the people have come to Shanghai's historic Buddhist temple, to the Methodist Moor Church, where pews overflow on Sundays. Nationwide, Christians, Catholics and Protestants, number between 30 million and 40 million, a small number for China, but huge compared to the four million or so Chinese Christians before the Communist revolution.

Dr. BOHR: They are searching for some sense of meaning, some moral compass, some spiritual principles that will connect them beyond Marxist materialist philosophy, a universal connectedness beyond China.

LAZARO: The return of worshippers to churches and temples is remarkable in a country that, for years, tried to wipe them out. China's government is officially atheist, and for almost two decades around the Cultural Revolution, thousands of buildings were destroyed or converted, and all public expressions of religion were outlawed.

China has long had a love-hate relationship with organized Christianity and its missionaries. They were revered for their work in education and health care. At the same time, missionaries were seen as an extension of western imperialism; their often chauvinistic preaching protected under 19th-century treaties imposed on China after it lost the so-called Opium Wars.

Missionaries also sympathized with the nationalist government of Chiang Kai-shek, found themselves on the wrong side of the revolution, and were expelled in the 1950s. So when churches were allowed to resurface in the early 1980s, it was on China's terms. They had to register and pledge allegiance to the Chinese state. Protestants were organized under a so-called three-self patriotic association: self-propagating, self-supporting, and self-governing, meaning no foreigners. Catholics were brought under a national patriotic Catholic association. Aloysius Jin is the patriotic bishop of Shanghai.

Bishop ALOYSIUS JIN: We are -- the Christianity is flourishing. Unfortunately, we Catholics are divided in the so-called underground Church and so-called official Church.

LAZARO: That divide among Catholics highlights a major problem some groups have under the Chinese system. To the so-called underground group, government authority is not acceptable in a Roman Catholic Church that is, after all, Roman.

The spiritual leader of China's underground Catholics lives in exile in Connecticut. This recent service celebrated the 98th birthday of Cardinal Ignatius Kung Pin-Mei. He spent 30 years in prison for refusing to renounce his loyalty to the pope. In 1998, he moved to the U.S. to live with his nephew, who runs the Cardinal Kung Foundation.