Police warned two Shanghai venues against hosting events, even as a state-run daily hailed the festival as a "showcase" of progress.
But the two women sentenced to 12 years in prison still face awful conditions. Their whereabouts since last week remain unknown.
The US moves toward sending the Chinese Muslims to Palau, a remote Pacific island. But some experts say that would be a mistake.
The Chinese Muslims, deemed no threat to the US, were released for resettlement and arrived Thursday.
On his recent European tour, Tibet's exiled leader preached compassion, but expressed frustration over 'lies and hypocrisy' from Beijing
Economic sanctions are designed to send a strong message without prompting a belligerent backlash.