Beijing is in the middle of a major architectural upheaval. The city's past belongs to the Forbidden City's red stamped-earth walls, the last remaining hutongs, the imposing Sino-Soviet-style edifices of the 1960s and 1970s and the tile-roofed "Chinese hat" buildings mandated through the 1990s.
But its present is dominated by cranes and concrete forms that will eventually give rise to luminous glass and steel creations that angle in unexpected directions.
The future cityscape will be marked by the weird and wonderful, such as the new China Central TV headquarters building and the National Theatre building behind the Great Hall of the People, nicknamed "alien egg".
The change is not simply physical. Day by day, Beijing is noisily and messily morphing into a more modern capital in both outlook and appearance.
"It's becoming a metropolis," said Vlad Reyes, general manager of the Hilton Hotel in Beijing. Although that may sound like an odd statement to make about a city of 15 million people, there is a certain logic to it. Beijing's population has nearly doubled in the last 12 years, with double-digit economic growth throughout, and this has brought renewed energy and optimism.
"In the mid-1990s movement was still restricted," said Reyes. "The streets were all bicycles and there were very few cars." Today, cars are an all too common sight on Beijing's streets (See: Exhausted: Beijing's traffic dilemma) and restrictions on movement around the city and residence in certain areas are long gone.
"Now, culture, international shows and exhibits are flourishing and becoming more sophisticated," Reyes added. "Art museums here are rivaling the ones in Paris and New York."
But Beijing's prosperity means that it is no longer a cheap place to do business.
According to a recent global cost-of-living survey by human resources firm Mercer – which focuses on the type of living costs primarily borne by the expat set – Beijing overtook Shanghai in 2006 to become the mainland's most expensive city, 14th on the worldwide list.
"At the end of the day, it's accession to the WTO that has really sparked all this growth," said Reyes, pointing to the fact that mainland Chinese business travelers – an insignificant group in the five-star hotel industry as little as five years ago – now make up the majority of his hotel's guests.
Imperial hub
As home to the imperial throne for nearly seven centuries, Beijing was never much of a business town. Up until its reinstatement as the national capital after the Communists defeated the Nationalists in 1949, Beijing's commercial importance in the country paled in comparison to that of its thriving next-door neighbor Tianjin, which served as its trading port and north China's financial center.
Upon the opening up and reform of the late 1970s and 1980s, however, Beijing became the place where outsiders, enticed by China's business potential, invariably ended up pitching their tents.
During the 1990s, which saw the renaissance of Shanghai and the inception of the Shanghai and Shenzhen stock exchanges (a third exchange, to be built in Beijing, was proposed and rejected), businesses were drawn away from the capital, though it stayed – and remains today – the necessary starting point for businesses in need of any regulatory assistance.
Beijing is China's political, not financial, center by policy directive, but, given the close relationship between politics and China's banks, one can be forgiven for not seeing the distinction so clearly. The Big Four state-owned banks' directors remain government appointees, for instance, and all have their headquarters in Beijing.
"Beijing's got a definitely a government town feel to it," says Alex McKinnon of New Zealand-based private equity firm Mahon China.
Both of the governments housed here – the Beijing municipal government and the national government – play important roles in the city's economic fate.
As the national capital, Beijing can rise above the regionalism that tends to define even the largest commercial centers like Shanghai, Guangzhou or Shenzhen.
"Being from Shanghai or Guangdong seems to raise certain animosities that don't arise from being in Beijing," said McKinnon. "If you're in Beijing, you don't get judged as being so regional. It's the capital, so it provides more of a national focus."
Big business all across China inevitably finds its way to Beijing. Foreign investments anywhere in the country in excess of US$100 million require central, not just local, regulatory approval.
The municipal government behaves in the same fashion as the governments of Shanghai or Tianjin with respect to its own economic zones and tax policies.
Though its operations are separate from those of the national government, their paths occasionally intersect: the recent Capital Land scandal that led to the firing of Vice Mayor Liu Zhihua and two other senior city officials was followed by reports that President Hu Jintao would be overseeing the corruption investigation.
A foreign businessman has alleged that Liu, the official in overall charge of Beijing's entire US$40 billion worth of Olympic-related construction, took a bribe in return for pushing forward a land development opportunity.
The swift reaction to the first whiffs of impropriety surrounding the Olympic build-up underscored Beijing's most pressing priority: making sure the Games go off without a hitch.
"Everyone here, from young kids to old people – they're all excited," said Leon Guan, owner of Leon Productions, an event-planning company in Beijing.
Olympic hype
Though generally optimistic about the prospect of the Games, the Hilton's Reyes notes that expectations have a way of spiraling out of control. "Just remember, the Olympics are going to be over after a two-week period," he said.
"The organizers are already telling some of the three and four-star hotels not to expect too much, because so far everyone is jacking up their prices, thinking that they'll all be booked solid."
With the dramatic increase in star-rated hotels in store (See: A sprint to the finish line: the pre-2008 building rush), occupancy levels are bound to drop before finally picking up again.
Beijing is pouring so much energy and anticipation into a 15-day period in August 2008 that one scarcely hears about anything beyond that fortnight.
International tourism looks sure to rise. As the home of a handful of China's most iconic spots, Beijing has long been China's top tourist destination, ahead of Shanghai and Xi'an. However, up to the present the makeup of city's visitors has been overwhelmingly Chinese – 97% of tourist arrivals in 2005 were domestic.
International arrivals are forecast to increase an average of 10.6% a year over the next five years.
The economic development of north China will continue to benefit Beijing well into the future. The Binhai New Area, a new development zone along Tianjin's coast on the Bohai Sea larger than Shanghai's Pudong area, is expected to emerge as a growth engine for the entire region.
"The Binhai initiative has caught the interest and imagination not only of the domestic but also the international finance industry," says Douglas Red of ANZ Bank. The more it grows, the more Beijing can expect to reap.