By Paul Eckert, Asia Correspondent

WASHINGTON, June 4 (Reuters) - Despite surging pride in China over the upcoming Beijing Olympics and anger at recent anti-Chinese protests, exiled democracy activist Yang Jianli retains high hopes for a movement crushed by troops and tanks 19 years ago.

Yang was in Washington on Wednesday for a rally marking the anniversary of the bloody June 4, 1989, crackdown on the Tiananmen Square democracy movement, after a 500-mile (800-km) protest walk from his home in Boston.

"I do not think the hyper-nationalist sentiment will last very long," he said of the angry mood on display in China that would appear to reject Yang's message and mission.

Flag-waving Chinese rallied in large numbers in Western and Asian cities earlier this year to demonstrate against people who protested China's policies in Tibet and human rights record as the Olympic torch traveled around the world.

China's state media and Chinese bloggers at home and overseas denounced Western media for what they said was biased coverage of unrest in Tibet. In some cases, they turned their wrath on fellow Chinese who questioned those views.

Yang said nationalism was not a worry to him and that the civic activism that followed the deadly May 12 earthquake in western China suggested how such sentiments could find productive outlets in the future.

"That's just temporary and when China becomes democratic, especially when local democracy becomes reality, people will tend to talk about local politics and care about public education and public health and corruption," he said.

Yang, 45, was released in April 2007 after serving five years in a Chinese prison on charges of stealing into the country and spying for Taiwan. He had traveled to China in 2002 on a friend's Chinese passport to observe labor unrest because China refused to renew his passport.

Yang told Reuters that learning about the Sichuan earthquake -- which killed at least 70,000 people -- was the low point of his one-month walk.

The response by ordinary Chinese -- an unprecedented outpouring of volunteerism and charity -- was uplifting to Yang, a permanent U.S. resident with doctoral degrees from Harvard and Berkeley universities who has lived in exile because of his involvement in the 1989 protests.

"I really feel great promise for the future of China based upon the power demonstrated by the Chinese people in their solidarity with the victims of the earthquake," said Yang. (Reporting by Paul Eckert; Editing by Peter Cooney)

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