The port of Shantou on China's south-east coast, was a thriving trading centre in the 19th Century but fell into decline once the People's Republic was founded.

Its position, just across the sea from Taiwan, made it a high strategic risk, but now, as China has steadily opened up to the outside world, Shantou has been dramatically revitalised.

We were told we were visiting a typical Chinese peasant and expected a simple house set in the fields. But this is Shantou and we should have known better.

We pulled up outside a five-storey mansion and set off through an imposing marble hallway up a broad staircase.

On the fourth floor, Mr Zhang received us in his sitting room. His home was so flawlessly brand new. The wall opposite Mr Zhang's throne-like chair was dominated by a vast television set and two security screens. Mr Zhang could keep his workforce under constant surveillance even while entertaining the foreign press.

Midas touch

Mr Zhang has got rich quick.

Eight years ago, he was a poor farmer, living in an overcrowded three room house with his wife and family. Then he took a risk, setting up a small business supplying aluminium to the building trade. His timing was perfect. Shantou's economic boom brought a tidal wave of construction. Now Mr Zhang is a peasant in a palace.

In my few days here, I saw Mr Zhang's story repeated again and again.

Shantou is at the cutting edge of China's economic reform programme.

The old state owned enterprises have almost disappeared. Foreign investment has been welcomed with open arms and special tax concessions. And everywhere small factories have mushroomed, making cheap electronics and textiles, jeans and underwear. The dynamic growth has turned farmers into tycoons almost overnight.

It is also a social revolution. More than half the local people now own their own homes. This month local banks are launching a brand new product: mortgages.

Changing times

The scale of the change hit home when we travelled through an old district of Shantou for a panoramic view across the city.

On the undeveloped side of the river, the hills were thickly coated with trees. The tiled rooves of a complex of Buddhist and Taoist temples poked their heads above the tree line.

On the way up, we passed the former British consulate, established here more than a century ago when Shantou was Europe's golden gateway to China.

Now, the plaster facade is cracked and crumbling and the gardens inside, tangled and overgrown. The local village was sleepy with half empty shops and ragged children.

But if this was the past, across the river, we saw the future waiting. Gleaming skyscrapers and shining office blocks were tightly packed along the waterfront like a second Hong Kong.

My local guide said all this had sprouted in the last 10 years - his memory from childhood was of peaceful villages and fields.

Fortune-seekers

As news of Shantou's boom has spread, migrant workers from poorer parts of China have flocked here in their thousands to make their fortunes.

I visited one re-employment centre where several hundred eager workers pressed into two small rooms, hoping for work. The manager told us he saw 1,500 people every day. Most of them did find jobs, he said, if they were not too fussy.

When we mingled in the crowd, the stories began to emerge. Most people had travelled here from other provinces, staying overnight with friends or renting a space in cheap dormitories.

Many had been laid off back home by failing state owned enterprises. Others had quit jobs because they hoped to earn four or fives times as much here. They were dauntingly optimistic, pressing forward to talk to us, exuding hope and the nervous anticipation of getting rich.

Miracle may be over

But the best times may have passed. Shantou's rapid growth is coming under threat as the economic crisis in South East Asia takes its toll. Some building sites are deserted, work suddenly stopped. Brand new housing blocks stood finished but almost empty.

Much of the money which has poured into Shantou in recent years has come from overseas Chinese, migrants from Shantou now living in Hong Kong or South East Asia. As those economies have been hit, the spare cash for investment back home has abruptly disappeared.

Our rich peasant, Mr Zhang, is well aware the economy is slowing down. His own business has dropped about 10%. Last year he had eight workers. This year he has been forced to let two of them go.

We asked politely about Mr Zhang's plans for the future and he smiled modestly.

He was biding his time, he said, but might set up a garment factory here once the economy's stabilised. In the meantime, he still works in the fields whenever he can. Why? He shrugged. He just wouldn't feel right if he weren't farming, he said, because China is a nation of farmers.