CHIEN-MIN CHUNG FOR TIME Chen is teaching high-end Chinese consumers what to wear, buy and even read

Coming of age during the Cultural Revolution, designer Chen Yifei felt hopelessly trapped. For the first decade of his artistic career, he painted Chairman Mao's face—and almost nothing else—for countless propaganda posters. He sometimes dreamed of depicting someone other than the Great Helmsman, but as a designated Revolutionary Socialist Painter, Chen wasn't allowed to branch out. In 1982 he left China for the U.S., where he eventually made a fortune painting what he liked. But Chen kept returning home, only to find China still mired in monotony: everyone lived in the same drab apartment blocks, decorated their whitewashed walls with the same tacky calendars and wore the same blue and brown clothes day in and day out. "I mean, there were 1 billion people living without any real sense of lifestyle," says Chen, who now runs a fashion empire out of Shanghai with $25 million in revenues. "My dream was to bring aesthetics to Chinese society."

The 55-year-old Chen is pulling off that bourgeois mission. The most commercially successful artist in modern China's history, Chen has sold his realist oil paintings for as much as $300,000 on the international market. Using the profits from his artwork, in 1998 Chen launched a chain of high-end clothing stores called Layefe—a play on his first name. Today, there are more than 100 branches in 35 cities, selling Banana-Republic-meets-People's-Republic togs. Eyeing China's boom in home ownership—nearly one-third of Shanghainese now live in apartments they or their families own—Chen started an interior design chain last year, with the flagship outlet located in Shanghai's Uber trendy Xintiandi district. Focusing on indigenous materials, Layefe sells Ming-style pottery from Jiangxi province, where China's imperial kilns were once based, as well as embroidered cushions spun from the finest Suzhou silk. To complete his aesthetics empire, Chen has also opened a modeling agency, which has signed this year's Miss China, Zhou Ling, and recently launched Vision, a Wallpaper-style magazine with Chinese characteristics. "Chinese have a lot of money now," says Chen, puffing on one of his trademark cigars. "But they need inspiration on how to spend it tastefully. That's where I come in."

Unlike other Chinese designers who stress an exotic chic, Chen isn't interested in making things that scream chinoiserie. "Nowadays, you see mandarin collars on Italian suits," he says, wearing just such a suit himself. "So who's to say what is Eastern and what is Western?" Nor, he says, do most mainlanders feel a need to don traditional Chinese clothes any more than an American wants to wear a ten-gallon hat to work. "Sure, there are colors and details that I use that are Eastern," says China's Martha Stewart wannabe (pre-stock woes, of course). "But what's most important to me is making sure our products are of an international standard. I want China to represent quality, not exoticism." Chen has certainly won over Lin Xiaozhao, a 32-year-old shopper at a Layefe outlet in Shanghai's tony Plaza 66 mall. "Before, I used to be embarrassed to buy Chinese clothing because I thought it looked cheap," she says, checking out a collection of sleek winter coats. "Now, everywhere I look in Shanghai, there are expensive clothing stores with styles like Layefe's." The true validation, though, comes from the street markets, where knockoff Layefe clothing now shares rack space with fake Prada and Armani—evidence that these vendors, at least, already regard Layefe as a coveted luxury label.