Beijing put pressure on Mr Mugabe to begin talks because of fears that the continuing crisis in Zimbabwe risked overshadowing the Olympics, according to government and diplomatic sources.
China's leaders, who have have long enjoyed a close relationship with Zimbabwe's beleagured president, feared growing protests in the run-up to the Games and so leaned on Mr Mugabe to agree to the historic talks which began on Thursday.
Their move came after Russia and China together infuriated the West by blocking a United Nations Security Council attempt to impose sanctions on members of the Zimbabwean regime.
Mr Mugabe and Morgan Tsvangirai, leader of the opposition Movement for Democratic Change, met for the first time in 10 years last week after signing a memorandum of understanding mediated by South Africa's president, Thabo Mbeki, to form a government of national unity.
But while Mr Mbeki basked in the glow of the diplomatic coup, winning high praise from the French president, Nicolas Sarkozy - currently in charge of the EU presidency - Zimbabwean government sources said he had little to do with it.
One government insider said: "The signing of the memorandum of understanding between Mugabe and Tsvangirai may appear to be a triumph for South African diplomacy under Mr Mbeki, but the power behind the curtain is China.
"China exerted diplomatic pressure on Harare for the protection of their own interests in this country, given the threat and risks of their economic investments under a new government. This explains the sudden change of heart by Mugabe. This is all choreographed."
The Chinese ambassador to Zimbabwe is understood to have told Zimbabwean foreign affairs officials in Harare that his government expects Mr Mugabe's administration to "behave" and help dampen international outrage over the recent elections.
One diplomatic source said: "Mugabe was told in clear terms by his Chinese friends that he has to behave and act in a way that will silence the international community.
China does not want a situation in which the Olympics will be snubbed.
"They also warned him (Mugabe) that if British Prime Minister, Gordon Brown and the US managed to force the tabling of UN Security Council sanctions against Zimbabwe again, they will be in no position to support Harare. China has demanded that loyalty back in equal terms."
China has invested billions of dollars not just in Zimbabwe, but across Africa in its attempts to secure mineral rights to fuel its burgeoning economy. Its trade with the continent is expected to rise to $100bn by 2010, a signficant amount of which involves |Zimbabwe's platinum mines.
Beijing has many different sources of leverage on Harare - a fact which has led to criticism from the West that it could have forced change on the Mugabe regime long ago.
Chinese soldiers have helped to train the Zimbabwean military for more than two decades, and many senior members of the ZanuPF ruling party have forged personal business relationships.
Among them, the vice president Joyce Mujuru, whose husband Simon is a former head of the armed forces, runs a company thought to export chickens to China.
Under the deal agreed last week ZanuPF and the opposition MDC have a two week deadline to agree on forming a government of national unity during talks in Pretoria.
The sticking point will be the positions of Mr Mugabe and Mr Tsvangirai: hardliners inside ZanuPF want Mr Mugabe, who has been president for 28 years, to continue in that poisiton with Mr Tsvangirai consigned to a more junior role as prime minister.
A Zimbabwean government source at the talks said: "Information is going about that the MDC will be offered the post of prime minister or vice president as a stop-gap measure to ease Zimbabwe's collapsing economy.
"However this must not be misconstrued as a weakness on the part of Zanu PF but as a strategy to keep the opposition out of full power. They will certainly find themselves on the drawing board again after a future election, because Zanu PF is not willing to relinquish power."
Zimbabwean officials know that aid from the US, Britain and the EU depends on the outcome of the talks. On Friday President George W.Bush stepped up US pressure on Mr Mugabe by introducing new sanctions against the "illegitimate" president.
The US Treasury Department was ordered to freeze the assets of 17 business enterprises controlled by the Zimbabwean government, banned Americans from doing business with them.
Mr Mugabe won a landslide victory last month in a vote condemned by Western nations and boycotted by Mr Tsvangirai, who cited government-sponsored violence and intimidation.
The MDC says 120 of its supporters have been killed by pro-Mugabe thugs and thousands injured since the first presidential vote, which it won but without a majority of all votes, on March 29.
