Jonathan Watts

Wang, a stout and ruddy power factory worker from Hunan, is in the bunk two below mine. He is as keen to demonstrate the conviviality of China as he is to wax lyrical about the country’s strength. As well as cracking open a bottle of beer and sharing his food, he offers a packet of Dongfanghong cigarettes — “I smoke these because it was Mao’s favorite brand” — and travel advice: “Actually, there isn’t much in Qinghai. It’s full of police and soldiers, but we have very good public order.”

Wang is one of about 60 passengers squeezed into a “hard sleeper” carriage as our overnight train rattles toward the sunset, passing a half-formed rainbow, the world’s largest saltwater lake, hillsides quilted with yellow rapeseed and the occasional white Tibetan yurt.

With a couple of hours left until lights out, my fellow travelers are looking for ways to kill time and forget the cramped and smoky conditions. Some play cards, others sing with their children, a curious few chat with a Tibetan monk. And when that entertainment runs out, several attempt to talk to me.

They are engagingly friendly. A family from Xining pours a pot of instant noodles and offers sightseeing tips. Two young sightseers from Hong Kong share their herbal remedies for altitude sickness and talk enviously about the mainland.

“There is an amazing can-do spirit in China these days,” says Susan Hong, a math teacher. “We used to have a bit of that in Hong Kong. But now we are so conservative compared to the mainland. Anything seems possible in China these days. It’s very exciting.”

As I get ready to turn in, Wang qualifies the level of his friendliness. “I am happy to share food and drink with you. We are friends with all countries now. Except Japan. If you were Japanese I would not share my food with you. And I would not let you sleep in the bunk above me.”

Perhaps it is the lack of oxygen here at 3,000 meters above sea level or the frequent patrols by ticket inspectors, but I have trouble getting to sleep. Instead, my mind races across the day’s contrasting impressions: the warmth of my fellow passengers, the sometimes scary nationalism of Wang, the can-do spirit.

China is a nation on the move. But should its economic growth be cause for alarm? Other nations have risen fast — Britain during the Industrial Revolution, the United States at the turn of the century, and Japan during and after the 1960s. However, it took Britain 100 years to rise; 60 for the U.S. and 30 for Japan. It seems China will be transformed in just a couple of decades. And it is not just the speed of change that is turning heads but the scale.

China has the world’s biggest population: 1.3 billion. Now those billions are traveling, earning and consuming more than ever before, and pessimists fear the world will be overrun by an eastern horde. Others, however, view China as the nation most capable of extending the limits of human civilization in centuries to come. This is where development is progressing fastest. This is where the biggest risks are taken, where the impossible seems possible.

The railway to Tibet is one of the greatest symbols of that spirit. Since it was built in 1984, the route from Xining, the provincial capital of Qinghai Province, to Golmud, the garrison town in China’s wild west, has been the train to nowhere. No one, it was believed, could build a line any further across the Qinghai plateau, certainly not one all the way to Tibet. It was too bleak, too cold, too high, too oxygen starved. Even the best Swiss tunneling engineers concluded that it was impossible to bore through the rock and ice of the Kunlun mountain range.

If that were not enough, even the flats were filled with perils. A meter or so below the surface was a thick layer of permafrost; above this, a layer of ice that melts and refreezes with the seasons and the rising and setting of the sun. How could anyone build a track on that? And how could a regular service be run in an area plagued by sandstorms in the summer and blizzards in the winter?

As the great train traveler Paul Theroux wrote in “Riding the Red Rooster,” these challenges are why the former Himalayan kingdom of Tibet — on the other side of the plateau — has remained unspoiled and so un-Chinese for so long. “The Kunlun Range is a guarantee that the railway will never get to Lhasa. That is probably a good thing. I thought I liked railways until I saw Tibet, and then I realized that I liked wilderness much more.”

But that guarantee no longer applies. Next month — three years ahead of schedule — Chinese engineers will lay the final section of track on a line stretching to Lhasa, across the roof of the world. Test runs will begin on the new line next July, and commercial services are scheduled to begin within two years.

Lhasa, the Tibetan capital, at 3,650 meters above sea level, is the obvious starting point if you want to understand what the railway will mean — for the Chinese and for the Tibetans. Just as in the United States 100 years ago, the tracks are at the heart of a plan to consolidate central control over a wild west. The settlers are from China’s Han ethnic majority rather than Europeans, and the natives are Tibetans rather than Cherokees, but Beijing’s policy is just as much about the imposition of the dominant culture as it is about economic development.

Two years ago I joined a government-organized tour of this ancient city in the clouds, the home of Tibetan Buddhism. Lhasa was already starting to look like any other town in China, with broad roads, huge white-tiled buildings and multicolored street lamps in the shape of palm trees. It was a garish clash of two cultures — the modern materialism of China and the medieval spiritualism of Tibet. The railway, then two years into construction, looked certain to intensify this clash.

Tibetans seemed divided. For independence activists, the railway would open the biggest channel yet for the influx of soldiers, traders and other sources of materialist Han pollution. Tenzin Metok Sither, a spokeswoman for the Free Tibet Campaign, said it would add to the already tense political situation. “This is a highly strategic project that seeks to tighten Beijing’s control over Tibet and will serve to further marginalize Tibetans economically and culturally.”

Others, however, grudgingly acknowledge the good that the trains might bring. I was surprised to find a living Buddha make one of the strongest arguments in favor of the railway. “We’ve been too backward, too isolated for too long,” said the lama, who asked that his name not be used. “The rest of the world is in the 21st century. We are still in the Middle Ages.” A more predictable advocate was the governor of the Tibetan Autonomous Region, Jampa Pahtsok. “It is unimaginable to have a high growth rate without a railroad.”

Among the four or five unscheduled meetings I had with Tibetans, most were looking forward to the economic benefits the line is expected to bring: 2.5 million tons of cargo and 1 million tourists and business people. However, monks and worshippers expressed their worries that the environment and traditional spiritualism of the Tibetan minority were under threat.

The issues of two years ago are very much the issues of today. With the first train services now less than two years away, Tibet’s exiled spiritual leader is increasingly worried about its impact.

“Some kind of cultural genocide is taking place,” the Dalai Lama said earlier this month. “In general, a railway link is very useful in order to develop, but not when politically motivated to bring about demographic change.”

The Tibetan dilemma is increasingly shared by other countries as the world tries to come to terms with China’s rise. Everyone wants Beijing’s money and goods; no one wants its ideas.

Economically, China’s expansion is a storming success, with 9 percent growth for each of the past 25 years, lifting hundreds of millions of peasants out of poverty, making a fortune for foreign manufacturers that exploit low-cost labor, pushing down supermarket prices across the globe and boosting trade with other developing nations.

Environmentally and spiritually, however, it is a disaster. China’s rivers are drying up, its cities are choked with pollution, the rural healthcare system has collapsed and the cities are seeing record levels of suicide and stress. China is showing all the symptoms of modernity — only on a bigger scale and at a faster rate than the world has ever seen.

This summer, when I renewed my relationship with the railway across the roof of the world, my first stop was Xining (2,275 meters), the first Chinese provincial capital that will be linked to Lhasa when the railway opens. This city is a garrison for the tens of thousands of troops and police needed to maintain order around this often troubled edge of the Chinese empire. Since the Communists came to power in 1949, it has also served as a black hole, where the government buries its political and military secrets.

Xining is the headquarters for the network of penal camps spread throughout the province, where millions of criminals, dissidents and political opponents of the leadership have been “reeducated through labor.” The Qinghai plateau’s remoteness has also made the town an ideal development and testing ground for the military. Among the few tourist sights is a memorial to the factory that made China’s first nuclear bomb.

For soldiers, Xining is a hardship posting. It sits in a bleak valley two kilometers above sea level, an altitude at which the brain and body start to struggle. On several occasions, Chinese troops based here have been sent to put down unrest in Tibet or to skirmish with Indian troops over the disputed area of Sikkim. But this is a time of unprecedented peace and development. Twenty years ago, there were almost no hotels or restaurants. Now there are dozens catering to an increasing number of business travelers, visiting officials and foreign tourists en route to Lhasa. While the main beneficiaries among the 270,000 population seem to be Han officials and businessmen, extra income is trickling down to Hui and Sala Muslim restaurants selling lamb kebabs and mianpian noodles, and to the peddlers of Tibetan trinkets and medicine.

One of the beneficiaries of the boom is Buddhism. This was evident from the mix of materialism, spiritualism and political cheek at the Ta’er Si, one of the great Tibetan monasteries. Set in rolling green hills just south of Xining and famed as the home of living buddhas since the 16th century, it is attracting an ever-growing number of Han tourists. Their chatter and mobile phones disturb monks as they chant tantric scriptures (“During the peak season, there are almost as many tour guides as monks,” complained one acolyte), but, as with the railway, the linking of materialism and spiritualism is not a one-way track.

Outside the monastery, the streets are filled with Buddhist wholesale shops (often run by Muslims) that offer bulk sales of robes, incense sticks, prayer wheels and beads. The customers are not tourists but monks, stocking up on paraphernalia to establish more monasteries. “This is a boom time for Buddhism in China,” says Glen Mullin, the author of several books on the Dalai Lama. “Many of the monasteries that were shut down and destroyed during the Cultural Revolution are being rebuilt, along with new ones.”

The thrice-daily service west from Xining to Golmud is as close to the roof of the world as a passenger can get on China’s rail network. But when the new Qinghai-Tibet railway opens, this 800-kilometer-long line will be the penultimate leg on the 48-hour journey from Beijing to Lhasa.

Luxury trains are being built for the new track. They feature pressurized carriages to minimize the risk of altitude sickness and tinted windows to protect from strong ultraviolet rays. Canada’s Bombardier has won the $280 million contract to build 361 cars, some of which will have deluxe sleeping compartments with individual showers, glass-walled sides to provide panoramic views, entertainment centers and gourmet dining areas, and toilets with sewage and waste-treatment systems. The cars will be pulled by diesel engines capable of maintaining an average speed of 100 kph, even at above 4,000 meters, when the thinness of the air can cut power by almost half.

The new train will be a world away from the crowded, smelly, smoke-filled carriage we boarded at Xining. The passengers were on narrow beds that climbed in three tiers almost all the way to the ceiling. There was no dining car, only trolleys selling instant noodles that could be served from giant steel flasks provided for each set of six beds.

We arrive in Golmud (2,800 meters) just after dawn. My Lonely Planet guidebook warns of a “forlorn outpost in the oblivion end of China.” But that book was published five years ago. Today, development seems to be everywhere. Many of the roads and buildings look new, and there is a plethora of cranes and construction sites. The newest addition to this city of 200,000 people is a giant two-story TV screen blaring out advertisements for cosmetics and electrical goods, such as would be seen in Tokyo, Seoul or Shanghai. The city has become more hospitable, too. There are four-star hotels that accept foreigners, along with neon-lit streets of restaurants, pink-lit “massage parlors” and gaudy karaoke bars.

With a few hours to kill, we visit the closest thing the city has to a museum. It is the former home of Gen. Mu Shengzhong, who oversaw the construction of the Golmud-to-Lhasa road in the early 1950s to consolidate China’s control over Tibet. When we arrive at the house, it is locked, and all we can see through a window is a huge bust of Gen. Mu in two otherwise empty rooms.

More profitably, we spend time with Zha Xi, a burly Tibetan from the Wild Yak Brigade. This ragtag patrol of two dozen men was formed to fight off poachers threatening endangered species. Having at least temporarily won the battle against the poachers, they are now turning their focus to the development of ecotourism on the Qinghai plateau.

Over a bowl of noodles, Zha admits to mixed feelings about the rate of change in the area. “Overall, I think it is a good thing because this area is poor and isolated, so people need more economic development. But it is bad for the environment. The railway is being built through the habitat of the Tibetan antelope. They are very timid animals and they have been scared off by the construction work.”

At Xidatan service station (4,350 meters), it is no longer possible to ride the train. We are now ahead of the operational tracks. Engines are ferrying equipment up and down the route, and we have to be content with a jeep ride along Gen. Mu’s bumpy highway. It is soon evident why so many people died during the construction of the road.

Soon after leaving Golmud, we hit the start of the Kunlun range. The craggy slopes on either side are so steep and barren that it is like driving through an alien planet. This is where engineers started blasting and building the first of the seven tunnels and 286 bridges on the 1,110-kilometer-long stretch of new line. At its maximum altitude in the Tanggula Pass, the track runs 5,072 meters above sea level — higher than Europe’s greatest peak, Mont Blanc, and more than 200 meters higher than the Peruvian railway in the Andes, which was previously the world’s most elevated track. The longest tunnel — at Yangbajin — stretches 3.3 kilometers. The longest bridge spans 11.7 kilometers over the Qingsui River.

Such awesome statistics are the scripture of China’s materialism, evidence of the powerful gospel of scientific development. So is the speed at which the track has been laid, three years ahead of the original seven-year schedule. For the disciples of the economic miracle, this is further proof of how China is overtaking the U.S. to become the country of bigger, higher, faster.

This ambition is apparent across the country, where Chinese engineers are building the world’s biggest dam, the longest bridge and the tallest building. Two years ago, China joined the United States and Russia as the only countries to put a man in space. Another will go up next month, and in 2007, the country plans to launch its first moon probe. But the railway across the top of the world is arguably the greatest example of the achievements and risks of this can-do spirit.

After driving for four hours, we stop to talk to some of the pioneers who have conquered the terrain at Xidatan, the first service station on the new line. Just completed, the small, brilliant-white building waits forlornly for passengers in the midst of a vast dirty gray plain of dust and stones. The nearest habitation is an exhaust-filled, rubbish-strewn strip of a dozen restaurants and a few petrol pumps. Perhaps the station’s function is strategic — the plain is also home to an encampment of hundreds of green People’s Liberation Army tents, trucks and artillery pieces.

The station’s current residents, however, are railway engineers who are looking forward to leaving. With the work almost complete, they are in good spirits, but they have faced treacherous conditions over the past four years. When Zhao Jianjun arrived from his native Shaanxi Province, he needed oxygen to breathe. Working mainly on viaducts, he helped to push the work forward at the rate of a kilometer of track a day. But for five months every winter, work became impossible in temperatures that fell to -30 degrees Celsius. Even in the warmer seasons, there were often snowfalls or hailstorms.

According to the Xinhua News Agency and my patriotic friend Wang, no one has died of altitude sickness, but Zhao says the work has claimed several lives. It is something we hear on several occasions, though no one knows how many of the 38,000 workers on the project have perished from accidents or illness.

From Xidatan, the railway climbs steadily toward Kunlun Pass (4,776 meters). This is one of the great doorways to the top of the world. It is also the northern shore of a vast sea of permafrost that stretches more than 600 kilometers across the plateau toward Tibet and the Himalayas, prompting some to describe this area as the third pole of the world.

This barrier of ice and rock had been considered impassable, but China’s scientists believe they have overcome the challenge. Their big technological breakthrough has been to insulate the track from the top level of ice, which thaws every summer day and freezes by night. On a normal line this would buckle the rails, collapse bridges and cave in tunnels. But for the new railway, engineers have pumped cooling agents into the ground so that the earth around the most vulnerable tunnels and pillars remains frozen and stable. It is not cheap. Largely because so much of the line has been built on viaducts rather than the semifrozen surface, the budget for the railway is 26.2 billion yuan ($3.24 billion).

But even this ingenious and expensive solution may not be enough to protect the track from the worst hazard affecting the plateau: global warming. If current trends continue, Chinese climatologists forecast a 3.4-degree Celsius rise over the next half century, which would lead to a shrinking of the ice by more than 30 percent.

At the pass, we meet two Hui-minority railway construction workers, who tell us the project is still bedeviled by the difficulty of securing firm foundations. “We have had to rebuild some of the stations because of permafrost damage,” say the laborers. “The construction bureau is now discussing how to solve the problem.”

If true, this would challenge official boasts that the most important technical challenge of the railway has been overcome. I was unable to confirm what damage had occurred. But there is more evidence that the railway’s engineers are struggling to keep pace with the environmental damage wrought by global warming.

Temperatures in Qinghai Plateau are rising twice as quickly as in the rest of China. Luo Yong, deputy director of the National Climate Center, estimates that the volume of ice on either side of the Qinghai-Tibet Highway has retreated by 12 percent since the 1960s. “By 2050, the safe operation of the Qinghai-Tibet railway will be affected if temperatures keep rising steadily as observed over the past decades,” Luo warned at a recent symposium.

To get a sense of the environmental changes, we take our four-by-four vehicle off the road to see one of the biggest glaciers on the route — the wall of ice wedged between two peaks near Dongdatan. It is a hard drive across broken rock and rivers, then a short climb to the foot of the glacier. The bright sun has me sweating. But this is nothing compared with the deep rivulets that the heat has cut into the ice. As we draw closer, each crease in the ice proves to be a torrent of gushing water that has been locked solid for hundreds — possibly thousands — of years. The glacier is retreating.

There were signs of landslides too, both on the slopes and back on the road, where subsidence caused by melting foundations had brought down bridges and cracked and potted several stretches of the road. Global warming was not the only cause. Near Kunlun Pass is a monument marking the huge earthquake that struck the area four years ago. It measured 8.1 on the Richter scale — ripping a seven-kilometer crack through the earth. This railway is going to be even harder to maintain than it has been to build.

The climb to the glacier is beginning to take its toll. I should have known better. Throughout the journey, the effects of the altitude had become increasingly apparent. On Day 1, as soon we stepped off the plane in Xining, crisp packets burst and a bottle of suntan lotion splurged its contents into my bag. A few hours later, I could feel a faint muzziness behind my temples. The next day in Golmud, 700 meters higher, my pen started leaking over my notes. Even at Xidatan, I quickly ran out of breath even after a slow walk.

But with the help of medicine — western Diamox and Chinese Hongjingtian — I convince myself I have mastered the elements, so I rush up the last 100 meters to the foot of the glacier. At more than 5,000 meters — where the air contains less than half of the oxygen at sea level — I realize it is a stupid thing to do. I am soon paying the price. Back in the car, my head starts pounding, then the nausea sets it. Two hours later in Wudaoliang (4,500 meters), I am throwing up by the side of the road. I recover only after squeezing a bag of oxygen through a tube into my nostrils. Adding insult to injury, just as I am retching, several elderly Chinese tourists trundle by serenely on bicycles en route from Golmud to Lhasa. Slow and steady, they show the alpine terrain the respect it is due.

But the fragile environment is also suffering. The farther we progress alongside the track, the more obvious is the damage. The roof of the world is leaking. Overgrazing has stripped off its thin grassy cover, and global warming has burned through its liquid insulation. Between the rail and the road are puddles and pools of melted permafrost. On either side, herds of cows and sheep munch on blotchy patches of grassland and man-made barriers attempt to keep the encroaching sand dunes at bay.

Settlement and modernization have brought the problem of nondegradable rubbish. Behind each cluster of buildings on the route — such as the small village-garrison of Wudaoliang — is a stinking pile of rotting bags, empty tins, plastic bottles and petrol cans. When I ask our driver how the refuse is disposed of, he laughs. “We leave that job to the wind and the rain and the dogs.” Half of this region belongs to China’s largest nature reserve.

This is the dark and dirty side of China’s development. Pan Yue, the deputy minister of the environment, says the Qinghai Plateau and the western region of China are so ecologically stressed that they can no longer support their current populations. Because there is not enough space for them all to be resettled quickly, he estimates that the country will soon have more than 150 million environmental refugees.

The problems are evident throughout the country. When the railway is finished, travelers on the train from Beijing to Lhasa will pass through some of the most polluted cities and overexploited farmlands in the world. Acid rain now falls on a third of the Chinese landmass. According to the World Bank, 16 of the planet’s 20 worst polluted cities are in China.

Just downstream from that glacier, and far across an endlessly bleak plain, is our destination: the station at Tuotuohe (4,200 meters), the biggest town between Golmud and the Tibetan border. It is the ultimate frontier community: a narrow strip of grubby buildings populated by a few hundred railway workers, soldiers, truck drivers and the providers of the services they seek — garages, restaurants, open-air pool tables, rough beds and a brothel. An endless stream of buses roars through on the road that Gen. Mu built.

We stay overnight in a grimy truckers lodge. Over dinner at the Chengdu First Class Restaurant, I am too tired to even chat. We have reached the place where China’s can-do spirit pushes people and the environment to the limit.

Just across the river, migrant laborers are rushing to finish the construction of a railway station. They are doing their part to achieve China’s engineering miracle, but there is no pride, only relief. “I’m too tired to feel glad,” says a welder from Xining who lives in a tent on the building site. “I have been here four months and I’m still not used to the altitude.”

This is the end of the line for me. Ahead is another vast barren plain, then the towering peaks of the Tanggula range, which mark the border with Tibet. The railway stretches forward, but I have seen its destination. It is time to head home.

On the way back, the clouds — seemingly close enough to touch — break in a fury, and the storm makes the stony, blotchy plains darker, damper and bleaker. The landscape looks as exhausted as the workers.

As the rain lashed down, I wondered who was to blame for the environmental disaster of the Qinghai Plateau. Certainly not only China. Global warming is a legacy of two centuries of industrial development in Europe, the United States and Japan. But in doing the same thing on a bigger scale and at a faster speed, China has the capacity to make things much worse, much more quickly.

If railway tracks can spread the tools of modern technology and education to Tibet, the lifestyles of some of the poorest people in the world could be dramatically improved. If ideas are allowed to flow freely in both directions along the track, the meeting of Chinese materialism and Tibetan spiritualism could fill a gap at both ends of the line. And if, as some suggest, the tracks are extended farther south to the border with Nepal and then on through the Himalayas to India, it could transform relations between the world’s two most populous and fastest-growing economies.

Present trends, however, suggest a much bleaker future. Fifty years ago, when Qinghai Plateau was part of Tibet, it was a scantly populated wilderness. Now, under Beijing’s control, it has become a land conquered and settled by Han engineers, miners, soldiers, police and prisoners. There are few grimmer examples of what Chinese-style development can mean for ethnic minorities and the environment.

In the 19th century, Britain and Europe taught the world how to produce. In the 20th, the United States taught us how to consume. If China is to lead the world in the 21st century, it must teach us how to sustain.

(Additional reporting by Huang Lisha.)

During that time, Qiaotou has transformed itself from a farming village into a manufacturing powerhouse — a microcosm of what has happened to the entire Chinese economy. It is a familiar story. Paddy fields have been cleared for factories. Peasants have become industrialists. The river, which used to be a clean source for irrigation, is now a heavily polluted outlet for brightly colored plastic waste.

The commercial revolution here is on a scale and at a pace that exceed anything under Mao Zedong. The first small workshop was established in 1980 by three brothers who picked up their first buttons off the street. Now the town’s 700 family-run factories churn out 15 billion buttons and 200 million meters of zippers a year. The low-investment, labor-intensive industry was ideal for this remote community. And it could not have timed its rise better. Qiaotou began popping buttons just as China started dressing up. Out went the Mao suits, and in came wardrobes of Western clothes.

If you’re looking for a button of exactly the right shape, size and material, this is the place to come. Every day, the wives and daughters of factory owners hawk bags of plastic, cloth, leather and metal samples on Market Street, where the town boasts it has 1,300 button shops selling 1,400 varieties of buttons.

And buyers do indeed come from all over the world. Attracted by prices of less than a penny a zipper and decent quality, international retail outlets and fashion houses are increasingly purchasing from Qiaotou. The local chamber of commerce estimates that three out of every five buttons in the world are made in the town. It ships more than 2 million zippers a day, making it the biggest winner of China’s 80 percent share of the international zipper market.

Until recently, such mind-boggling statistics were used as evidence of the Chinese miracle. Now, however, the global domination of manufacturing towns such as Qiaotou is increasingly being discussed in very different terms: as a sign of the Chinese threat.

After the insanity of the Cultural Revolution, the world cheered on the market-oriented reforms initiated by Deng Xiaoping. Growth of more than 9 percent a year for more than two decades has lifted hundreds of millions out of poverty. Consumers across the globe have benefited from the cheap goods churned out by low-paid factory workers in Qiaotou and elsewhere.

But in the past few months, the cheers have been replaced by warnings. A flood of Chinese goods has swept into European and American markets, threatening jobs and alarming Washington and Brussels. Last year, America’s trade deficit with China hit $162 billion — the largest imbalance ever with a single country — while Europe’s deficit rose to 18 billion euros. In the first four months of this year, textile imports from China rose more than 100 percent; last week, the Bush administration responded by setting a limit on shipments of jackets, trousers and shirts. Europe has taken a less aggressive line, but it has also set quotas to protect its clothing industries from Chinese competitors. The advantage does not just come from low wages, however; Washington has also ratcheted up pressure on Beijing to reevaluate its currency — the yuan, or renminbi — which U.S. manufacturers claim is undervalued by 40 percent, giving Chinese exporters an unfair advantage.

Qiaotou’s businessmen are unfazed. “Even if we lose a few customers in the short term, they will have to come back,” says Ye Ke Lian, president of the Great Wall Zipper group. “There is almost nowhere else in the world that makes zippers.” A more urgent problem is a shortage of labor and electricity — both of which suggest the market is already working to reduce China’s trade surplus. As well as having to import more oil, labor costs look set to rise. Qiaotou used to rely on a seemingly inexhaustible supply of migrant workers, but salaries of 1,000 yuan (about $120) a month are no longer enough to lure peasants from the countryside. The town currently has about 50,000 migrant workers, but this is 10 percent fewer than it needs.

Qiaotou’s zipper and button tycoons have experienced tougher times. Ye was a child during the Great Leap Forward, when he remembers many of his neighbors not having enough to eat, and grew up during the persecution of the Cultural Revolution. “Everyone was poor. I didn’t get my first bicycle until my 20s. I bought my first car only five years ago.” His company today owns three factories, employs 1,000 people and claims assets of 80 million yuan.

It is a similar story throughout the southern coastal provinces — the heartland of Chinese manufacturing. With endless streets of giant factories and company dormitories, the most developed areas, such as Shenzhen and Shanghai, are the modern-day equivalents of Manchester and Birmingham, England, at the peak of the Industrial Revolution. But many small towns, not even worthy of a speck on most maps, have also become worldbeaters by focusing on labor-intensive niches.

Drive through the verdant Zhejiang and Jiangsu countryside and the hills and forests give way to manufacturing communities that dominate global markets. Start at the toothbrush town of Hang Ji, pass the tie mecca of Sheng Zhou, head east to the home of cheap cigarette lighters in Zhang Qi, slip down the coast to the giant shoe factories of Wen Ling, then move back inland to Yiwu, which not only makes more socks than anywhere else on Earth but also sells almost everything under the sun.

For if China is the workshop of the world, Yiwu is its showroom. Selling everything from engine parts and cranes to hairclips and costume jewelry, this local market has grown from a few dozen street stalls 10 years ago to become the world’s biggest commodity trading center. It is now home to three giant wholesale malls covering a floor space of 800,000 square meters. Half as much space again will be added in October with the completion of the second stage of the international trade center.

The town is rapidly becoming the world’s bazaar, with 34,000 stall holders selling a stunningly colorful smorgasbord of locally made, gloriously tacky products. There are alleys full of plastic crocodiles and inflatable guitars, forests of fake plants and plastic flowers, and football pitches full of every size and type of ball imaginable.

Wholesale purchasers come here from all over the globe. The town estimates that 5,000 foreign merchants have established permanent bases in Yiwu. Each year, an additional 200,000 visit for short-term sprees, snapping up containers of trinkets for resale in gift shops. Religious boundaries are no barrier: One stall sells battery-powered frames with illuminated verses from the Quran beside flashing portraits of Jesus and images of Krishna.

“This is the best market in the world right now,” says Lucia, a buyer from Bulgaria. “I used to buy from Turkey, but things in China are so cheap you can’t imagine.” On this trip — one of six she makes every year — she plans to spend $60,000, enough to fill two containers with toys, hair decorations and shells. She sells them with a 300 percent markup in Italy, less in Romania.

While most buyers seem to be from the Middle East, Ye says buyers from big Western companies also source many of their products in Yiwu. Few like to reveal their activities, not least because Yiwu’s products are often made under license for resale as brand-name goods. Some purchasers, however, just want to keep their rivals from finding out about Yiwu. “This was our secret,” says a regular British customer. “Now word about Yiwu is getting out, so we are having to look elsewhere.”

According to local officials, Yiwu sells almost 500 million yuan of goods to the U.K. each year — a fraction of its 29.9 billion yuan in exports. With growth of 30 percent a year, the town is now aiming to become the world’s largest supermarket. “We’ve only just started to go global, but once foreign customers hear about us, they’ll come in droves,” says He Pei Song, president of the Zhejiang China Commodities City group, which runs the international trade center. “Nowhere else offers this variety of products at this price. China is the cheapest country in the world, and we are the cheapest market in China. So people can make big profits by buying here and selling back home.”

That is, of course, how a free market works. But this one is being threatened by the protectionist winds blowing through the corridors of power. U.S. talk of unfair currency manipulation and the need for trade quotas has been heard before. Japan’s domination of the world markets for cars and electronics in the 1980s led to a fierce trade dispute and pressure for appreciation of the yen. When Tokyo gave in, the flood of money into Japan inflated an enormous speculative bubble in the early ’90s, which burst after a decade of economic stagnation.

China is anxious that its miracle should not sour like Japan’s, but at least it can argue that it is less of an economic threat: While Sony and Toyota were taking on U.S. manufacturers in high-tech, high-value sectors, China’s biggest exporters are still low-tech operations such as those in Qiaotou and Yiwu. When Japan was accused of taking over the business world, the average income of its workers had surpassed that of their counterparts in the United States, with average salaries of over $20,000 in 1990. The same could not be said of China, where average incomes only recently passed $100 a month.

“Foreign countries say they want China to develop, but when we do, they become frightened of us,” says Wu Xie’en, the head of Huaxi village, which has rapidly built a steel and textile industry. “China is changing. The countryside is changing. So are our attitudes. Change is a cause for hope. But China needs to be given time. We need stability.”

After two decades allowing towns such as Qiaotou and Yiwu to grow almost unnoticed, the world has suddenly realized just how powerful these specks on the map have become. Thanks to globalization, the crotches of the world are being zipped and buttoned up by deft-fingered migrant workers in a Zhejiang backwater, billions of our teeth are being brushed with bristles from Huang Zi, our cigarettes are being lit by the sparks of Zhang Qi, and our toes are being covered by the socks of Yiwu.

And it is hard to imagine that this will end anytime soon. Lanswe, the biggest sock and stocking manufacturer in the world, spins out 2 million socks a day. Within two years the company plans to triple its workforce to 15,000 and increase output to 5 million socks a day. Textile quotas or no textile quotas, half of them are destined for export.

The company’s president, Weng Rong Jin, says he can understand why Brussels wants to restrict this growth, even though it might hurt his business. But in the long run, he says, change must come through market forces rather than export quotas and currency manipulation. “Even if the yuan gets stronger, rich countries will still import socks because they cannot make them cheaply enough themselves. If rich nations really want to compete with China, they need to make us richer. That’s the best way to make prices rise here.”

To demonstrate how good that cocktail is supposed to make the locals feel, “Huaxi Road” is decorated with smiling pictures of every family in the village. Each household’s assets are listed in detail: size of the family, value of their property, average level of education, number of members of the Communist Party, as well as how many cars, mobile phones, televisions, washing machines, computers, air-conditioning units, motorbikes, cameras, fridges and stereo systems they own.

At first sight, the figures seem to justify Huaxi’s boast about being the “No. 1 village in China.” Since 1995, when Huaxi became the first commune in China to list shares on a stock exchange, local businesses, mostly in textiles and steel, have taken off. Their spectacular expansion has made even the national average growth rate of 9 percent a year seem laggardly. In 2003, the village reported the combined turnover of its companies at 10 billion renminbi (about 640 million pounds). Last year, it hit 26 billionn — and by 2008 it is expected to double again.

This has turned residents — all still officially registered as peasants — into wealthy industrialists. Elsewhere in the country, the annual average disposable income of urban dwellers only recently passed $1,000. In the countryside, the figure is two-thirds lower. But Huaxi’s residents get a yearly salary of $1,500, a bonus of $10,000 and dividends of $25,000. Twenty years ago, most were farmers living in small, one-story houses, who struggled to save the money to buy a bicycle. Now, they are shareholders with an average living space of more than 450 square meters and at least one family car.

Such impressive statistics mean Huaxi is now held up as a model in a nationwide reeducation campaign for Communist Party cadres. It is also attracting growing numbers of foreign visitors seeking clues about the direction of Chinese society.

That is a subject of increasing concern to the world. Earlier this year, Microsoft’s Bill Gates praised China for developing a “new form of capitalism.” Politicians in Beijing prefer to talk about “scientific socialism” or “socialism with Chinese characteristics.” Huaxi’s model is by no means the only option for villages, but if it becomes a template the future might just as easily be described as shareholder feudalism.

Located about 100 miles north of Shanghai in Jiangsu province, Huaxi has been described in the domestic media as both a “paradise” and a “dictatorship.” While its residents are nominally richer than any other community, they have less time and freedom to spend their money. Bars and restaurants close before 10 p.m. so that workers do not oversleep. Holidays are scarce. And villagers get little cash from their paper assets. Eighty percent of their annual bonus and 95 percent of their dividend must be reinvested in the commune. If they leave the village, this paper wealth disappears.

“Our assets belong to the commune, not to the individual,” said Sun Hai Yan, a member of the village government. “We have a local saying that your dividend lasts only as long as you stay in the village and the factories keep running.”

But with living standards improving rapidly, few people seem to mind. Sun has done particularly well. As a child he remembers being able to eat meat only once a week. Now, he treats visitors to lavish meals of globe fish at the local restaurant and lives in a new villa — decorated with Greek pillars and a marble staircase — by the edge of an artificial lake.

Pragmatism rather than ideology is the guiding principle. “No matter whether it’s a new kind of ism or an old kind of ism, our aim is to make everyone rich,” said Wu Renbao, the former village chief who is credited with starting the Huaxi miracle.

During the cultural revolution, Wu was publicly humiliated in the village square as a “capitalist roader” because he wanted to establish a factory in the community. Five years later during the early reform period, he was criticized again for bucking the national trend to give peasants back their land. Instead, he kept property under collective ownership so that it was easier to expropriate for business.

Now, he is held up as a national hero. But he says the guiding principle is simple. “People here have five aims in life: money, a car, a house, a son and respect. We give them that. Every family here is rich. Our target now is to make all of China rich.”

The Huaxi system appears to resemble the imperial dynasties of old more than communism. At the top is the ruling family: Wu has been replaced as village chief by his son, Xie’en, who was recently reelected with 100 percent of the votes in the commune. At least half of the village’s main companies are run by other children and grandchildren.

At the bottom are the 30,000 migrant workers who do most of the work in the steel mills and textile factories for less than 80 pounds a month. “They get the same salaries as locals,” said Wu. “The difference is that they don’t own any capital.”

Huaxi has to maintain rapid growth, however, to keep everyone happy. The original village of 1,500 households has swallowed 26 villages in a quest for more land. The population is now more than 60,000, including migrants.

Xie’en says political stability is the basis for rapid growth. “I think every era has a different formula for success. The most important thing is to be flexible and open to new ways to thinking. We must do whatever works,” he says. “We are not Communist. We are 100 percent shareholder owned.”

But at the local nursery school, the children — 80 percent of whom are boys from migrant families — are taught otherwise. “The sky of Huaxi is the sky of communism. The land of Huaxi is the land of socialism,” goes the village song sung by the headmistress Wu Jie — another granddaughter of the old general secretary. “We take the kids around our village and show them how wealthy we have become. We tell them that it is thanks to our hardworking village chief,” said Wu Jie. “We want them to grow up to be good communists.”

In America and Europe it was the summer of love, but in Vietnam this was the year of the Tet offensive and some of the fiercest fighting of one of the 20th century’s messiest wars. Hien’s 19-year-old boyfriend, Bill, had just finished a tour of duty in Binh Duong province and was on his way back home to the United States. He planned to go to college and make a new start. Seven days after Bill left she gave birth to a son and had to find another man who would put his name on the birth certificate.

It was an all too common story. During the 10-year war U.S. troops are estimated to have conceived and abandoned — albeit sometimes unknowingly — an estimated 50,000 babies. Although half have subsequently emigrated to the United States, these so-called Amerasians have become a symbol of Washington’s failure to live up to its commitment to South Vietnam.

This was particularly true on April 30, 1975, when the last few American troops evacuated Saigon, since renamed Ho Chi Minh City, leaving behind desperate crowds of South Vietnamese who feared retribution from the victorious troops of the Communist North.

To hide their affiliations to the United States South Vietnamese soldiers stripped off their uniforms and many mothers abandoned their Amerasian children. Many were forced to live on the street, one reason why they became known locally as “children of dust.”

But 30 years on, their plight — often neglected, ill-educated and vulnerable to drug abuse — is increasingly pricking the consciences of American war veterans, who are returning in growing numbers to search for and support the girlfriends and children they left behind.

Now around retirement age, many of these former GIs and Marines have the affluence, leisure and inclination to revisit the past. Their task has been made easier by the recent improvement in relations between Washington and Hanoi, the Internet and DNA paternity tests. Hien’s letter from Bill is one of the positive results.

At the center of the campaign is the Amerasian Child Find Network, a Web-based organization that claims to have reunited 300 U.S. fathers and their Amerasian children since it was established in November 2001. It was set up by Clint Haines, a veteran and former private investigator, who found his girlfriend after a 10-year search and is now looking for his child. He says he was forced to leave them in 1971 by the military, which made it impossible for noncommissioned soldiers to take back wives.

He was reunited with his former girlfriend after paying almost $1,000 for newspaper ads and a TV commercial in the Quang Nan area where they had last met. In the next few days he expects to get the results of DNA tests that will tell him whether he has also located his son, who was given to an orphanage.

“I hope it’s him. He’s so destitute, I want to help him,” said Haines, 53, who has a family in the United States. “But I won’t get emotionally involved yet. There have been so many ups and downs. One woman tricked me and her own daughter into believing we were related. I need to see the tests.”

His caution is understandable. After a spate of claims by fake Amerasians the U.S. Consulate has tightened its visa application policy for people claiming American parentage. Even Hien’s son turned out not to have been Bill’s child, according to two recent DNA tests.

“More and more American men and Amerasian children are trying to find each other,” said Phan, a Vietnamese man who works as a liaison between the two groups. “But it’s very difficult. In most cases the mothers remember nothing. “Many were cleaners at U.S. bases or prostitutes, who were not well educated and had several boyfriends at the same time. After the Communists took control in 1975 many mothers were afraid of being associated with the enemy, so they burned all evidence of their old lovers.”

That has not stopped some veterans from launching what appear to be hopeless searches. Last month Rafael Pagan, a former Army quartermaster, returned to Long Binh Army Base to look for a girlfriend he had last seen in 1969. “I loved her and she was pregnant when I left, so I still feel responsible to help my child,” said the 60-year-old, who is now a store clerk in a New York hospital. “The problem is, I don’t remember her name.”

Despite the lack of information several Amerasians have replied to an ad he put in the newspaper with his picture and details. Two have sent off DNA samples, each of which will cost several hundred dollars to be processed. Pagan says he is not daunted by the cost or the long odds. “I went to Saigon in the hope that I’d see some results. Whatever it takes, I will do it.”

A further complication is drugs, which are as widely used now in Vietnam as they were in the psychedelic ’60s.

Phan Anh Nhung was born in a prison, where her mother was interned for selling drugs. She says she was conceived while her father, a U.S. soldier, was on the run from military police after he stole and sold an Army Jeep to finance his cocaine and opium habit. He was sent home before she was born. But a few years ago a friend helped her track down her father, who now sends a few hundreds dollars every month. They exchange letters and plan to meet for the first time later this year. “If he really comes, I’ll be so happy to meet him I’ll faint,” she said.

Others are not so fortunate. Dothi Thu Qiyen was abandoned soon after she was born and has no idea who her parents are. Her appearance, however, has marked her out for maltreatment. To make ends meet and feed her three children, she started selling opium at $3 a pipe and last week left prison after serving a six-year term. “I would love to look for my father,” she said. “But I don’t know where to start.”

Some stories, however, end happily. Vietnam’s most famous Amerasian is Phuong Thao, a pop singer who was conceived the night before her father was sent back to America in 1967. “Mom never talked about my father. I never asked. She thought it was impossible to find him. She just wanted to forget,” said Thao. “But I thought about him. At school I was taught that Americans killed many Vietnamese. So I wondered whether my daddy was a good guy or a bad guy.”

When she was 28 years old she got the chance to ask the question in person after an American writer helped her to track down her father, James Yoder, who had been unaware of her existence. “The first time I met him I cried like a baby,” recalled Thao. “I looked exactly like him.” They meet from time to time, and the singer has been to visit his family in the United States. She now guesses that her voice comes from her Irish grandmother. Whatever the origins, it has proved a huge hit with the mainstream Vietnamese audience.

But Thao’s heart-rending lyrics are still filled with the sadness of the past. “In my dreams, I hear my mother’s voice. In the night, I’m waiting for someone to call” is the chorus of a famous song about an abandoned daughter’s wish to live with her missing parents. “Why did you leave me when I was young?”

But the consequences for Huankantou are far from clear. Having put more than 30 police in the hospital, five critically, the 10,000 residents should be bracing for a backlash. Instead, the mood is euphoric. Children have not been to school since Sunday’s clash. There are roadblocks outside the chemical factory that was the origin of the dispute. Late at night the streets are full of gawking tourists, marshaled around the battleground by proud locals who bellow chaotic instructions through loudspeakers.

“Aren’t these villagers brave? They are so tough it’s unbelievable,” said a taxi driver from Yiwu, the nearest city. “Everybody wants to come and see this place. We really admire them.

“We came to take a look because many people have heard of the riot,” said a fashionably dressed young woman who had come from Yiwu with friends. “This is really big news.”

Although the aftermath is evident in a school car park full of smashed police buses, burned-out cars and streets full of broken bricks and discarded sticks, the origin of the riot is hazy. Initial reports suggested that it started after the death of two elderly women, who were run over when police attempted to clear their protest against a chemical factory in a nearby industrial park. Witnesses confirmed that the local old people’s association had kept a 24-hour vigil for two weeks outside the plant. Many said they had heard of the deaths, but no one could name the victims. The local government of Dongyang insists there were no fatalities.

Like many of the other disputes that have racked China in the past year, frustration had been simmering for some time. Locals accused officials of seizing the land for the industrial park — built in 2002 — without their consent. Some blamed toxins from the chemical plant for ruined crops, malformed babies and contamination of the local Huashui River.

The village chief reportedly refused to hold a public meeting to hear these grievances. Attempts to petition the central government also proved fruitless. Locals said they had lost faith in the authorities. “The Communists are even worse than the Japanese,” said one man.

Memories are still fresh of the fighting on Sunday. “It was about 4 a.m. and I was woken up by an unusual noise,” said Wang, a shopkeeper who lives next to the school where the fiercest fighting took place. “When I looked out of the window, I saw lots of riot police running into the village. Many men rushed out of their houses to defend our village.”

Accounts of the conflict differ. Residents say 3,000 police stormed the village, several people (including police) were killed, dozens were wounded and 30 police buses were destroyed. But the Dongyang government says about 1,000 police and local officials were attacked by a mob, which led to 36 injuries and no deaths.

The outcome is also unclear. Locals say the village chief has fled. In his place, they have established an organizing committee, though its members are a secret. This suggests a fear of recriminations, but the public mood is one of bravado.

“We don’t feel regret about what we have done,” said a middle-aged man. “The police have not come back since they withdrew on Monday. They dare not return.” Some, however, admitted to anxiety. Among them was an old woman — also named Wang — who reluctantly opened her doors to visitors who had come to see her collection of trophies from the battle. “I am scared,” she said, as she showed two dented riot police helmets, several empty gas canisters, a policeman’s jacket and several truncheons and machetes. “This is getting bigger and bigger.”

But there have been no arrests and no communication from the authorities. The current leadership will be keen to avoid a Tiananmen Square-style confrontation, including Prime Minister Wen Jiabao, who pleaded with the Tiananmen protesters to leave before the tanks came. At the same time, the authorities are committed to social stability.

According to government statistics, protests increased by 15 percent last year to 58,000, with more than 3 million people taking part. In many provincial capitals, roadblocks occur more than once a week. Last weekend, anti-Japanese demonstrators rallied in three cities, including Beijing.

But in Huankantou, villagers do not seem to realize that although they have won the battle, they may be far from winning the war. Amid a crowd of locals beside a wrecked bus, one middle-aged woman won a cheer of approval by calling for the government to make the first move toward reconciliation. “It’s up to them to start talking,” she said. “I don’t know what we would do if the police came back again, but our demand is to make the factory move out of the village. We will not compromise on that.”

Qiu’s favorite game was “Legend of Mir III,” a South Korean game that is a huge hit throughout Asia. It took him hours in front of a computer to win the dragon saber, one of the game’s most valuable weapons.

He used a feature of the game to lend it to Zhu Caoyuan, who reportedly sold it on without his permission for 7,200 yuan (about $870). Although this is considerably more than the average monthly wage, the police told Qui that they could do nothing because the law does not recognize virtual property. He has pleaded guilty to the manslaughter of Zhu, a crime that can carry the death penalty.

The number of Internet users is estimated to have doubled from under 60 million in 2002 to more than 120 million. More than a third are believed to be game players, creating one of the world’s most lucrative online markets. The operators’ revenue has grown by more than 40 percent in each of the past two years. Shanda Networking, the biggest online game company, with at least 2 million users at any given time of the day, more than doubled its profits last year.

The national leadership said recently that the country’s biggest skill shortage was of Internet game developers. The Information Ministry estimates that China needs 600,000 online game technicians to fight off foreign competition.

But there is also growing alarm about the social consequences. The government has cracked down on unlicensed Internet cafes, which the official news agency called “hotbeds of juvenile crime and depravity.”

Newspapers are filled with reports of game-related crimes and tragedies, such as the suicide in January of a boy of 13 who left notes saying he was so addicted to online games that he had difficulty distinguishing between reality and virtual reality. Last March, two students in Chongqing fell asleep on a railway track after an all-night game session on the Internet, and a 31-year old “Legend of Mir” addict reportedly dropped dead after a 20-hour session.

Many of the crimes are related to the thefts of virtual possessions. Hardcore players invest so much time and money in building a powerful online character that the loss or theft of a virtual identity prompts some to take violent action.

At the Shanda customer complaints office in Shanghai, where the staff work behind reinforced glass panels, an advisor, Cassie Fan, said: “We get about a thousand complaints a week. I have been threatened on several occasions. People put so much time and energy into the games that some get extremely upset.” One customer was so enraged that he set fire to himself, suffering serious burns.