By Mary Hennock and Manuela Zoninsein

The stage at D22 has fallen silent and dark--and Michael Pettis, owner of the popular Beijing rock club, says he never saw it coming. City authorities shut down the music without warning in early July because his club lacked a performance license. "They just turned up," says Pettis. "There was no notice … No time to adjust."

Beijing is full of bars, restaurants and businesses that have operated successfully for years without a full set of licenses. The rules were often so hard to understand that even city inspectors made little effort to enforce them--until now. Suddenly the city is cracking down on everyone in sight. Pettis, a 50-year-old New Yorker, has filed his license application, and all he can do is sweat out the few weeks that remain before Aug. 8. Whether or not he gets permission to reopen his bar for the out-of-town crowd of a lifetime, the Games are about to begin.

China's leaders want this Olympiad to be perfect. "The smiles of 1.3 billion Chinese will be reciprocated by the smiles of people all over the world," Premier Wen Jiabao promised at his annual meeting with foreign media earlier this year. But in the name of perfection, Beijing's inspectors are dusting off the rulebooks and pouncing on the tiniest supposed infractions. "In the last two months, all kinds of checkups have been harsher and harsher", says Tobi Demke, the Swedish manager of a Thai restaurant near the Workers Stadium expatriate bar zone. "There are a lot of regulations… and now, because of the Olympics, they really enforce them." Bar owners say inspections are taking place at least weekly. One pasta restaurant has been ordered to stop serving salads and desserts. Why? The license lists its business as "noodles," and the enforcers say that means nothing but spaghetti. "They don't understand the way it's done," says manager Angela Wang. "Western food, you eat appetizers, salad, dessert."

China has made enormous sacrifices to get ready. To clear the city's notoriously dirty skies, authorities have closed factories in a half-dozen nearby provinces and restricted cars to driving on alternate days, based on odd or even number plates. To boost security, police have set up hundreds of checkpoints on major roads into the city. But that's creating other problems. "It's difficult to get deliveries, ingredients," says French barkeep Matthieu Magery. He's been stockpiling wine recently, alarmed by rumors of a possible ban on transporting liquids during the Games.

Club owners say the government's runaway regulators are trampling the city's once-thriving entertainment scene. The nightlife guide Time Out Beijing is planning a double issue for August and September: there's not enough going on to fill two single issues. Commercial and legal uncertainties have made clubs nervous about committing to hire big-name DJs and bands. "In the month of the Olympics, there's less to write about than at any time in the last few years," says the magazine's editor, Tom Pattinson. "It's either a private party, or it's not happening."

For plenty of expatriates the party's really over: if they haven't been tossed out of the country, friends of theirs have. Formerly lax enforcement of China's visa laws has turned strict. Younger members of the expat community have been particularly hard-hit, and they're the ones who keep many of the city's nightspots in business. "Numerous bar owners have told me that a good portion of their regular customers are gone, and gone because of visa issues," says Jim Boyce, a self-confessed barfly who blogs about Beijing's nightlife. "I've lost, like, 50 percent of my customers," says Stefano Fin, proprietor of the once-bustling Aperitivo, in the suddenly quiet Sanlitun bar district. "No one comes anymore." Club owners and patrons worry that the next step might be a crackdown on Beijing's previously ignored 2 a.m. closing law.

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