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Dawn came up on Peking. It was immediately apparent that this sprawling and countrified capital was turning into a vertical city. It was thick with tall cranes, the heavy twenty-story variety that are shaped like an upside-down L. I counted sixty of them before we reached Peking Central Station. They were building new apartment blocks, towers, hotels, office buildings. There were overpasses and new tunnels, and most of the roads looked recent. The traffic choked some of these streets. The city was bigger, noisier, brighter, more prosperous — it amazed me, because I had seen it in thinner times. And of course I was thinking also of the Russian gloom and Mongolian deprivation and Polish anger; the self-denial and rapacity, the food shortages, the banged-up cars. Peking was being transformed, as if someone had simply sent out a decree saying, "Build this city." In a way, that was exactly what had happened. This new mood, this boom, was less than five years old. In Chinese history that is no more than an eye-blink, but it was clear that the city was rising.

That was my first impression — of newness: new taxis, new buildings, clean streets, bright clothes, billboards. It was not a lived-in looking city, but rather one for visitors — tourists and businessmen. There were nine new hotels going up, and more restaurants and department stores. No new theaters or parks. The new schools specialized in languages and offered courses in tourism; and one of the larger new schools did nothing but train taxi drivers. Some movie houses had reopened, but there were no new orchestras. Peking had stopped being an imperial city and had begun to be a tourist attraction. The most disturbing sign of its transformation was that it was full of foreign bankers and accountants.

It is probably true to say that any nation that is passionate about putting up new buildings is equally passionate about pulling old ones down. For a thousand years or more Peking was surrounded by a high and elaborate wall, with vast pillars and gates, that had made the city into a fortress. In 1963, to make room for some hideous tenements, the wall was knocked down. Its absence has not been particularly lamented. The traditional Chinese compounds they call yards (siheyuan), with the wall, the circular moon gate and screen behind it, and the rambling house — these made up the residential sections of Peking. They too are mostly gone — again sacrificed to the tower blocks. The little inns and guest houses are going or gone, and huge hotels have taken their place — the Holiday Inn and the Sheraton Great Wall are but two of the thirty high-priced hotels. The part of Peking that has not changed at all is the Forbidden City, for even the Chinese know that if they were to pull that down, there would be no reason for anyone to visit Peking. And any sentiment the Chinese may have about Tiananmen Square is contradicted by the Kentucky Fried Chicken outlet they have recently installed in the southwest corner, not far from Chairman Mao Memorial Hall.

That Chinese history is layer upon layer, the present half-obliterating the past, is dramatically evident in the big-character slogans of Chairman Mao's thoughts that have been painted over with Toyota ads or turned into billboards for toothpaste and watches. Just beneath the new car or the computer or the brand name it is often possible to read All Reactionaries Are Paper Tigers! or We Should Support Whatever the Enemy Opposes! As in Datong, there are far too many of these and they are far too boldly inscribed for anyone to do anything but paint over them — and even then there is usually a reminding remnant that is legible. Perhaps the reason there are so many billboards and printed slogans of a commercial nature in Peking is not that these are in themselves valuable but that they are useful in covering up the Mao worship in six-foot Chinese characters that were known as Highest Instruction (zuigao zhishi) — the phrase pertains only to Mao.

I asked Mr. Peng why the slogans were crossed out.

'They were just political."

"Is that bad?"

"They weren't practical."

But in 1985 a victory celebration after a football game turned into a xenophobic riot in which foreigners were attacked and car windows broken. And billboards advertising Japanese goods were the focus for some of the violence. Subsequently, some of the billboards were quietly removed or modified. On a previous occasion, another football victory (China beat Bulgaria) caused a crowd of several thousand Chinese fans to gather late one night in front of the Peking Hotel and chant "We beat you! We beat you!" Then, only foreigners stayed in that hotel, which was why it was the focus of the mob's gloating. But now the phrase "foreign friends" is on everyone's lips. The poet Yen-shi Chiu-t'u wrote a century ago: Last year we called him the Foreign Devil,

Now we call him "Mr. Foreigner, Sir!" We weep over the departed but smile when

a new wife takes her place.

Ah, the affairs of the world are like

the turning of a wheel.

Because of a prior arrangement, and because foreign travelers are assigned to hotels, I was at the Yan Xiang Hotel, paying 160 yuan ($53) a night. Mr. Peng was in what he called a Chinese hotel — it didn't have a name, it had a number — for which he paid 3 yuan (75 cents) a night. This was not unusual. There are Chinese prices and foreigner's prices, a double standard that is applied in restaurants and shops; to entrance fees to museums and exhibitions; on buses, in taxis, planes and trains. On the average, a foreigner is required to pay three or four times more than a Chinese person. An American of Chinese extraction who has lived in Boston since birth and speaks no Mandarin is not classified as a foreigner: overseas Chinese are another category. Businessmen and official visitors are yet another class, with certain privileges.

It is impossible to come across these complicated class distinctions and not feel that in time they will create the kind of conflicts that led to the Cultural Revolution. Mr. Peng said maybe — because the average wage (100 yuan a month) was still too low, bonuses too irregular, and for the first time in its history The People's Republic was experiencing inflation.

"But I hope it won't happen," Mr. Peng said. "I think revolution is destructive."

"If there hadn't been a revolution in China, your life would have been rather different."

"Maybe better, maybe worse," he said.

I said, "But can't you say that you've lived through an interesting period of history?"

"Just a little bit of it. Chinese history is enormous. The Cultural Revolution was hardly anything."

In The House of Exile, Nora Wain writes, "I asked what war this was. Shun-ko's husband answered, 'It is not a war. It is just a period. When you are adequately educated in Chinese history you will comprehend. We have these intervals of unrest, sixty to a hundred years in length, between dynasties, throughout the forty-six centuries of our history.'"

Mr. Peng had not been a Red Guard. He was in his early teens during the Cultural Revolution, but he had resisted joining the unit. It had not made him popular.

"To show that I loved Chairman Mao I had to engage in the demonstrations. But my heart wasn't in it. It was regarded as wonderful to wear an armband that showed you were a Red Guard. And the best thing was to be the leader of your Red Guard unit."

"Who was the leader at your school?"