What Soho is to New York and Chelsea is to London, 798 is to Beijing. Four years ago Jessica Au studied the art community's struggle to survive demolition. With the Olympics just around the corner, authorities decided to give the expat-friendly enclave a reprieve.. Recently Au returned to find 798 undergoing another kind of transformation; here's what she found:

     I was in Beijing during the sticky summer of 2004 when the fate of the city's 798 art district hung by a thin thread. Beijing's equivalent to London's Chelsea art hub was facing the bulldozers. Rumors that the owners (Seven Star Group) were on the brink of selling the hive of artist's lofts and studios to make way for an electronics multiplex had been circulating for months. Then something quite unprecedented happened. At the beginning of this year, China's leaders announced that the area, also known as Dashanzi, should be preserved as a "cultural landmark."

     Four years have rolled by since I'd last visited 798 and I was curious to see what had become of it. Just like every trip that I've made to China over the last decade, I prepared myself for the inevitable feeling of shock and awe that ensues when I'm confronted firsthand by China's ever-morphing landscape. But nothing could have quite prepared me for the full-extent of 798s facelift. As my cab driver swerved into the gates, I noticed the first of many new additions: a neon sign welcoming visitors to the district.

     The entrance to the district was buzzing with visitors. My cab driver laughed hysterically as I gawked at the newly-built tree-lined streets, glossy billboards, flower boxes, benches, public toilets, and the rows of luxury cars parked inside. With the Olympics just around the bend, teams of workers stood toiling away in the muggy afternoon heat, paving streets and erecting sign posts. "This place used to be nothing but a dump," he said. "I didn't even know it existed. Now people want to come here all the time. It's famous!"

     As I wandered through the site (some 2 million square feet) I marveled at the number of newly opened cafes, bookstores, shops, bars, and galleries -- displaying everything from Lu Peng's latest works to a collection of questionable stuffed sheep heads. Many prestigious foreign galleries have also recently set up spaces, including Marella, Continuum, as well as the Ullens Center for Contemporary Art (UCCA), a Belgian foundation, which owns the world's biggest collection of Chinese art.

     From humble beginnings, 798 had seemingly mushroomed into China's premier hub for contemporary art, comparable to Berlin's art district and New York's SoHo. Then, just when I thought that I had seen it all, I stumbled across a gigantic, red-brick Nike store. It's "Made In China" sneakers shamelessly on display.

       Built on the grounds of a former military factory, artists first began trickling into the Dashanzi district at the start of 2001. By 2002, the site had become a place where not only China's avant-garde artists but curators, directors and writers gathered. Just four years ago, the area was a warren of dusty back alleys, galleries, studios, smokestacks and graffiti splashed on faded factory walls. There were no signposts or proper streets. There was even barely any running water or electricity. It was a bohemian ghetto of chaos and creativity, which is exactly what had endeared me to the place.

     So has 798 lost its edge?

     Ask any Beijinger what they think about 798 and they will tell you that they either love it or hate it.  Those that loathe it are usually of the opinion that 798 has succumbed to the type of blatant commercialism that characterizes China today.

      Artists and gallery owners bemoan that as fashion boutiques and swanky nightclubs have popped up on every corner, the area has increasingly catered to tourists and casual visitors, rather than people who are serious about art. Consultants now offer guided tours in English, Japanese and Mandarin. And, together with the Forbidden City and Great Wall, 798 has been designated an official tourist destination, with as many as 10,000 people a day expected to visit during the Games, including Olympic athletes and heads of states.

      New galleries spring up so quickly that the listings in "City Weekend" and other publications can't even keep up. "In 2003 there were very few galleries in 798 but they were showing very good work," says Australian gallery owner Brian Wallace, whose Red Gate Gallery was the first foreign-owned space for contemporary art in China. "Now it has everything from high-end galleries to shop fronts and everything in between. It can be quite frustrating for visitors to wade through all the litter."

     Escalating rents have driven many artists out. Initially, they were attracted to the area because of its loft-like spaces, its proximity to the foreign embassies (the only place that they were allowed to previously exhibit their works), and above all cheap rents. Now all but a sprinkling of artists have relocated to less pretentious areas such as Song Zhuang, Bei Gao and Caochangdi Village. Rents have increased more than ten-fold since 2001, meaning that some galleries and institutions are turning to more lucrative activities to survive. These include using their spaces to promote launches of big brands, like Sony and Motorola, and even foreign fashion shows.

     Subletting too is a huge problem, with landlords often blatantly disregarding tenant agreements. "It makes me sad to see how 798 has lost a lot of it's soul in the face of commercialization," says Tamsin Roberts, whose own gallery - Red T - was one of handful of places forced to vacate in March to make space for a new, multi-story car park, ahead of the Olympic traffic. "The land is still owned by the munitions factory. They don't check or veto unsuitable galleries; they're just happy to sell spaces to the highest bidder."

        Arguably, there is no other art district in the world that is able to match 798s diversity and dynamism. The art on display is truly representative of the entire Chinese scene, from photography to oil paintings, by all of the country's leading lights, like Zeng Fengzhi, Cai Guo-Qiang and Zhang Xiaogang. More importantly, Dashanzi has given China an internationally recognized art district that is not only fostered by the government but is also pushing the boundaries of what is considered acceptable.

     "798 is very much representative of China coming to grips with its own modernity," says Texan Robert Bernell, who was the first foreigner to move his publishing company and bookstore Timezone 8 into 798 in 2001. "Chinese contemporary culture was something that the government used to regard with disdain. But art is the goose that laid the golden egg for them. And as much as they don't necessarily approve of what is happening here, they have to let it be." Whether or not 798 falls victim to its own success, Beijing's art scene will continue to blossom for many a summer to come.