China is witnessing the worst bout of political turmoil it has seen since the student-led democracy movement of 1989. The unrest is evidence of major policy failure:

Development, the policy of the current regime for trying to absorb Tibet into the mainstream of national life, has opened up opportunities in Tibet, but for exploitation by Han and other Chinese groups as much as Tibetans. Inwards migration, made easier by growing communications links, is exacerbating tensions.
Beijing has had years to extend and fine-tune its control over Tibet and over the Tibetan population. In particular, it watches over the monasteries to ensure compliance. Nevertheless, monks have again provided a first focus of protest, highlighting shortcomings in security and intelligence.
The unrest represents a setback for President Hu Jintao personally. He was party leader of Tibet at the time of the last major Tibetan protests, in 1989, and came to power five years ago promoting the achievement of 'harmony' as the Chinese Communist Party's (CCP) primary mission under his watch.
The riots have been a public relations disaster for Beijing, which likes to maintain that all the minorities in China are well served by and happy with CCP rule.
Beijing resists talking to the exiled Dalai Lama, revered by Tibetans as their spiritual leader, and vilifies him as a 'splittist' bent on separating Tibet from China. The Dalai Lama has demanded greater autonomy short of outright independence. The failure to engage properly with the Dalai Lama and the language employed against him reinforces the impression for many abroad that the regime in Beijing is politically backward and threatening.