Scapegoats are suffering for a financial crisis few understand. Nick Cumming-Bruce reports from Jember, East Java

Heavy locks on the steel door of their modest village shop and the fear that discourages Lucy and her ethnic Chinese family from walking the few yards from their house to open it reveal the racial hatred threatening to turn Indonesia's economic crisis into violence.

"It looks dangerous," Lucy says after venturing a few yards up a side street in her east Javanese village of Balung and then turning back. "I can see it on people's faces."

A week earlier a mob of stone-throwing Indonesian youths with knives, sickles and iron bars attacked their shop screaming "Kill the Chinese". As the family ran for their lives, the mob emptied the cash drawer, stole 40 sacks of rice and tried to set the shop on fire.

Now the Chinese "ghost-to-ghost" network, as they call their grapevine, has warned them that when midday prayers have finished at the local mosque, their shop will be attacked again and burnt down. As they speak, a gang of 40 motorcyclists are breaking into a Chinese-owned store a mile or two up the road.

"I've heard they are going to burn all the Chinese houses on the 29th," Lucy says, wistfully handing over snaps of a married sister in Derby. "I plan to move away for a few days. If I had enough money I would go to England."

The attack was part of a wave of anti-Chinese violence in eastern Java, the most crowded and politically dominant island in Indonesia's vast archipelago. In the coastal town of Muger, some people have printed the word "Muslim" on their doors as protection against the mob which rampaged through their streets earlier this month. Last Friday Chinese shops were smashed in another eastern town, Probbolingo.

The day before the attack in Balung, fire reduced the "Source of Gold", a fancy new shopping mall in the nearby town of Jember to a smoke-blackened shell. Local Indonesians say it was an accident, but local Chinese are convinced it was racially inspired arson.

But it is not only the ethnic Chinese who fear that East Java's experience may prove to be only a modest forerunner of wider rioting reminiscent of the violence which preceded President Suharto's rise to power 32 years ago.

"There's no grip on the situation to prevent local conflict from becoming a national conflict," warns Marzuki Darussman, an MP (sic - former MP) who sits on Indonesia's human rights commission. East Java's violence is a response to the financial crisis that has plunged Indonesia's currency to disaster levels, not just for debt-burdened corporate giants but for small consumers at the end of a food production chain heavily affected by the cost of imports.

Few understand why basic essentials have doubled or tripled in price, and why cooking oil is running out. "Is Indonesia going to war?" a Jakarta resident recalls someone asking in his home village.

The frustration inflames bitterness towards the Chinesewho represent only 3 per cent of Indonesia's 200 million people but control 70 per cent of its wealth. The Chinese are getting richer at the expense of poorer Indonesians by hoarding and profiteering, says Mushodiq Fikri, a Muslim leader in Jember. "People are suffering, they wait for a chance to react, so this [violence] could happen a few more times."

The authorities too are starting to make scapegoats of the Chinese. The Chinese worry about how the situation will develop as real hardship sets in. Chinese-owned shops already depend on selling old stock and are not buying more "If I buy and sell at these prices I will die," one store owner explained simply. Goods now available, albeit at high prices, will just run out.

In East Java some Chinese are not waiting to find out what happens then. The flow of Chinese from smaller villages to bigger towns has already begun.