CHIEN-MIN CHUNG FROM TIME REMNANTS: A vendor waits for customers amid the ruins of a traditional dwelling. The homes behind him are also marked for demolition

The night the officials came to tell Meng Liantong they planned to tear down her Beijing home, she felt lucky. Meng, a 33-year-old bookkeeper, had resided in this house—20 rickety square meters of gray brick along a narrow, cramped lane known as a hutong—all her life. But she was tired of it: tired of burning coal in the winter for heat, tired of walking down the block to use the public outhouse, tired of living "a backward life" in a city loudly infatuated with its march toward progress. Meng wanted out. Purchasing a new house was out of the question. Together, she and her husband earned $360 per month, plenty for them and their five-year-old daughter to live on but not nearly enough to buy into Beijing's booming real estate market. So when the officials said they would pay her $950 for each square meter, she gratefully signed on the dotted line. The next day, when the character chai, for "demolish," appeared daubed in red paint on Meng's door, she says she "felt very happy."

With their $19,000 windfall, Meng and her husband bought a 160-square-meter apartment in a block of state-subsidized housing in a new suburb about an hour's drive from the center of Beijing. The apartment has central heating and flush toilets. "It's clean," says Meng, "it's green and it's modern." But for now, at least, it's also empty. No sooner had she bought the apartment than Meng realized living in the suburbs was not everything she had imagined. Her hastily built new town had only one school, and Meng worried that standards there were lower than at schools in central Beijing. The local hospital was too far away for her elderly in-laws to consider moving in with her. So these days Meng lives with them in a small apartment provided by their work unit, not far from her old house. Space is tight, but her daughter attends a well-established primary school 30 minutes away by bike and relishes the attentions of her doting grandparents. As for Meng, she's convinced she'll someday make it to that new apartment, "maybe in two years, maybe in five."

These are disorienting times for residents of China's capital. Beijing is in the midst of an overhaul of mammoth proportions. City planners have been scrambling to decongest overcrowded central areas, alleviate crippling traffic jams, and house a population expected to hit 12.5 million by 2010. Although other major metropolises worldwide face similar problems, Beijing's headaches are, as with most things in China, more severe and more urgent, especially with the city preparing to host the 2008 Olympics. Narrow roads must be widened and infrastructure improved, and the city must also meet the standards of a leadership increasingly preoccupied with how the world perceives it. The pace of change is so dizzying Beijing cabbies now joke that having grown up in the city is actually a handicap to finding one's way around.

It's not just a matter of rapidly upgrading infrastructure, however. Beijing has become the latest arena for heated debate on the centuries-old question of how China can move forward and still preserve its cultural identity. The very "Chinese flavor" that the capital wants to project to its millions of international visitors is becoming a victim of the city's rush to modernize. Entire neighborhoods of traditional hutongs are being leveled virtually overnight, and high-rises clamber out of the rubble. In the past three years alone, state-directed demolition of "dangerous and old" houses like Meng's has sent 572,000 residents packing—a number equivalent to the total population of Washington, D.C. As the landscape of the city shifts, so too will the patterns of daily life within its ever-expanding boundaries. Rising real estate prices at the center of the city will force millions to relocate to less expensive suburbs. And immediate families will replace neighborhoods as the focal point for urban community building.

Beijing's current urban blueprint dates to the early Ming dynasty, when the usurper Emperor Yongle moved his throne here from Nanjing in 1420. Yongle's formidable palace, the Forbidden City, lay at the city center, surrounded by a web of alleyways and gray-hued quadrangle-courtyard houses encircled in turn by a highly fortified outer wall. The basic plan survived for centuries. Unlike Tokyo or London, Beijing had no great fires to force rebuilding. The Manchu emperors of the Qing dynasty made minor modifications, but it wasn't until Mao Zedong came to power in 1949, determined to make his capital a showcase for ideology and industry, that the city underwent substantial change. Mao's minions leveled temples, paved over moats and canals, and tore down the city wall. They built factories, uniform brick apartment blocks and, most famously, the hulking Soviet-style command centers that line Tiananmen Square. Workers and peasants were encouraged to occupy confiscated houses once inhabited by members of the imperial gentry. The houses were repeatedly subdivided until many barely had courtyards at all. These zayuanr—"eclectic yards" in the local patois—and the lanes that linked them became the city's most recognizable living arrangement.

On a recent morning in a hutong adjacent to the temple where Yongle's subjects paid homage to Confucius, two old men in matching blue Mao suits have set up their armchairs near a crumbling brick wall. They're there every morning keeping an eye on the neighborhood. Three boys in their school uniforms kick a football, which the old men swat with their canes from time to time. A few yards down the lane, a group of middle-aged women (some still in their pajamas) gather to buy oily fried breakfast buns and steaming soy milk ladled into their cups and pots from off the back of a bicycle wagon. Meanwhile the neighborhood baker is doing a brisk business in savory vegetable pies. "Eat up while it's hot," he says, handing a fennel-and-egg cake to a little girl on the back of her father's bike. "How's your hip this morning, Old Wang?" he yells to an old man hobbling past with a bag of persimmons.

Culturally, Beijing's humble hutongs embody the central paradox of China's uneasy relationship with its past; they are simultaneously a source of national pride and shame. The hutongs are venerated as physical links to China's much-vaunted 5,000-year history—celebrated in art, literature and, of course, tourist guidebooks, as symbols of the endurance and adaptability of the Chinese people through centuries of war, foreign conquest and political upheaval. But these lanes are also equated with "backwardness," dismissed as remnants of a dark, unsophisticated era incompatible, both physically and conceptually, with the first half of the country's winning Olympic formula: "New Beijing, Great Olympics."

This conflict defies easy solutions. Even those pragmatic about the necessity of change fear that when the old houses vanish, Beijing will have lost its last vestiges of aesthetic identity. For if the hutongs are the city's physical vernacular, then its new high-rises—tarted up with Roman columns, metal balls and blinking rainbow lights—are its architectural Babel. Yin Zhi, director of the Institute of Urban Planning and Design at Tsinghua University's School of Architecture, acknowledges that many hutong houses are structurally unsound and overcrowded, but he likens their demolition to clear cutting. "Soon it will be too late," he says, "And unless you're standing in front of a landmark, you'll have no way of telling that you're in Beijing. You could be anywhere in China."

The Cultural Relics Bureau has been working with urban planning groups to protect buildings, streets and even a few neighborhoods deemed to be of historical or architectural value. A handful of noteworthy homes have been renovated—such as Qing Dynasty scholar Ji Xiaolan's house, which will be reincarnated as a small museum. But most ordinary hutong houses are simply razed, their owners, like bookkeeper Meng, bought out. Throwing money at the old neighborhoods to fix them up, though helpful, is not enough. "Even houses that look charming on the outside are often beyond repair," says Zhu Jiaguang of the Beijing Municipal Institute of City Planning and Design. "If we left them alone they might last another few years, but the minute we try to install modern plumbing, they crumble."

Instead, the hutong houses that will remain are totally rebuilt high-end homes. For example, in a neighborhood north of the Forbidden City, residents are receiving notice that they have a month to vacate their premises. They are being bought out, to the tune of $1,200 per square meter, with funds the government entrusts to the Beijing Intelligent Sea Benevolence and Demolition Company, a private demolition and real estate-development outfit. The company will then lease the land from the government (all land in China is still state-owned) and erect five or six courtyard houses, built according to old plans but fitted with modern appliances. Though fake, these traditional-looking luxury villas appeal to wealthy buyers—not only mainlanders but also ethnic Chinese from Hong Kong and overseas. The price tag for owning a piece of (almost) history: $1.68 million. Such a high figure automatically excludes the original owners. Zhou Yonghui, director of Beijing Intelligent Sea, says she plans to take photographs of the houses she demolishes and then put them in frames next to the doors of the houses she builds. "That way," she says, "when the old residents come back to visit, they'll be able to tell where they used to live. They can point to the beautiful new courtyard house and say, 'Look, that used to be my house.'"

That may be paltry comfort. Like Meng, many who sold out are thrilled to upgrade their standard of living, if dismayed by the inconvenience of life on the city's periphery. But they also mourn the loss of the tightly knit social networks and the culture of casual companionship and interdependence that the crowded living conditions in the hutongs naturally foster. Many former residents say what they miss most is the acceptable practice of barging in on one's neighbors. When old neighborhoods in Beijing are torn down, families who have lived side by side for decades, sometimes even generations, tend to scatter. And many stay away from the sites of their former homes, saying it's too painful to look back. "There's simply no returning," says Liu Xinwu, a writer whose novels chronicle the lives of families in hutong homes. When asked if he's ever revisited the site where his leafy courtyard once stood, he responds with a grimace: "I couldn't bear to see what's there now; it's just too terrifying."

The changes in the shape of urban space are driving city dwellers to lead increasingly isolated lives, confined to the private space of their own houses as opposed to the many communal spaces of the hutong. "In a hutong everyone knew everyone else's business," says 52-year-old Lao Jiu, an unemployed bachelor who now lives in a suburban apartment block. "You needed to borrow a cabbage, you knocked on a door. You got sick, someone would stick their head in every hour to check on you. Whether you liked it or not, you were never ever alone." Lao Jiu worries less about himself than about his grandnephew who lives nearby. "The kid commutes over an hour each day to school," he grumbles, "In a hutong he'd walk home with classmates and then hang around playing. Here he's always on his own. He's got no one to toughen him up. If someone teases him, he doesn't know how to respond." Meng too frets about how her daughter will fare if she ever does move to her suburban dream house, "Not only is she an only child," she says, "but she also doesn't have regular contact with people outside her immediate family. In the hutong, she would have had to learn to deal with all kinds of different people. She doesn't yet know how to share. She doesn't understand what it means to live in a community."

The full impact of this dislocation on Beijing's cultural life is unclear. If history can provide any answers, French Emperor Napoleon III's reconstruction of Paris in the 1850s may offer some clues. His master planner, Baron Georges Haussmann, razed most of the city, replacing crooked-laned working-class neighborhoods (breeding grounds for both disease and political opposition) with orderly boulevards. The barricade-building masses were banished to inexpensive banlieues, and France's burgeoning middle class made the new city a haven—and a playground—for its newly minted wealth.

Beijing is likely to move in the same direction. Perhaps, as in Paris, this will give Beijing's middle class more room to reinvent the city's cultural profile, or maybe, as Beijing's pessimists fear, it will simply create a sprawling cultural wasteland, dotted here and there with relics of a more vibrant past. What does Lao Jiu think will replace the hutong life he misses so much? He scratches his head and stares blankly at a cluster of new buildings under construction outside his window. Then he brightens. "That's easy," he says, grinning. "Modernization."