Twenty years ago this month, a friend and I boarded a train from Hong Kong into a China that was gradually turning its face outwards, yet where only 12 cities were open to foreigners. We began the long ride north squashed between people carrying orange trees, the Cantonese new year symbol.

Everyone smoked constantly and spat often, sipping weak tea from mugs endlessly refilled from the hot-water urns in each carriage. Every couple of hours attendants mopped the rubbish and spittle from beneath our feet.

Above, red paper banners warned against carrying fireworks - essential for Chinese new year celebrations. The smokers stuffed their fireworks into the overhead racks and puffed away beneath them. My copy of China Daily said trains had been known to blow up at this time of year. But, after days of travelling, we made Peking, as we called it, safely.

Recently I returned, on a comfortable Air China 747-400, sipping Great Wall red wine, with no one smoking or spitting. Arriving at Beijing’s new airport after an eight-and-a-half-hour flight, I find the route to the city centre lined with skyscrapers. In 1984, the rush hour meant massed bicycles in coal-scented morning air; now, new cars jam the wide thoroughfares and new homeowners use natural gas.

“The government changes but, whether socialist or capitalist, Mao’s portrait still hangs in Tiananmen Square,” says my guide, Ann Lee. The embalmed body of the architect of the 1949 revolution still attracts long queues. Opposite his mausoleum, a clock on the wall of the National Museum ticks away the days until the Olympic Games open in Beijing in 2008.

Everywhere there are signs of preparation, although many projects are already finished. The restoration of the Forbidden City continues, but the Starbucks inside its walls has not yet been removed.

As I am wondering how to bring up the subject of June 4, 1989, Ann Lee reads my mind. She was an English teacher then, and tells me how sad she is that one of her students, “kind of naughty but very smart”, was one of those killed when the tanks rolled into Tiananmen Square to crush democracy protesters. Now the masses are tourists, most of them Chinese: buying kites and Mao watches in the square; gasping at the huge sandalwood beams of the Temple of Heaven, and having a grand day out in the grounds of the Summer Palace.

This is where people gather in impromptu groups to practise their tai chi, ballroom dancing or jiving. You can join in and give everyone a laugh. A gang of many more than four sing opera, experts twirl ribbons in elegant shapes or play keepy-uppy with feathered shuttlecocks. Older people write poems on the pavement with giant brushes.

Twenty years ago skaters crowded the frozen lake here, the fun on their faces contrasting with their severe Mao suits. These days, even among the groups of elderly people from the countryside walking along the top of the Great Wall in the winter sunshine, there are no Mao suits; they wear matching baseball caps instead. When these pensioners were born in the 1930s, country people were still binding the feet of baby girls. Now, young women in kitten heels stride along the stones laughing into their mobiles.

Before we leave the popular Badaling entrance to the Wall, vendors at street stalls call out: “Harrods quality, Tesco prices.” The quality has improved, but the “I climbed the Great Wall” transfer on the T-shirts has not changed in two decades.

Away from China’s 5,000-year cultural history, we explore Xiushui Jie, or Silk Alley. Foreigners may want to stock up on brocade bags, cashmere, leather, and even golf clubs, but for Chinese people, “eating is the No. 1 job”, says Ann Lee. She’s horrified to find that we’re more interested in the night food market along Dong Hua Men than a traditional banquet with Peking duck. But what tourist could resist barbecued starfish, silkworm, snake, centipede, goat’s testicle and scorpion (although they do make better photographs than snacks)?

Moving swiftly on, we find beer and cocktails to wash it all down at Le Lotus Bleu in Lotus Lane, a street of cool bars with great music. The night food stalls have been modernised and sanitised, while Silk Alley’s ramshackle stalls are soon to be replaced by a modern mall, so before we leave it’s good to find that one part of grimy old Peking remains. In the hutongs, or alleyways, one or two householders welcome visitors with stories of life in the the bad old days. How to get there? By bicycle rickshaw, cheerfully raced by young drivers who suffer no imperial, or communist, hangovers.

Cultural Tours offers eight-nightnine-day tours to China from late March from pound;1,305 per person half-board. Or it can tailor-make a trip to catch the new year celebrations (from February 9) in Beijing at half-term from pound;640 per person, including direct return flights with Air China, six days’ bed and breakfast at the four-star Novotel Peace Hotel, taxes and transfers, but not including a visa (about pound;43). Details: 020 7636 7906; culturaltours@btclick.com.Chinese new year information: www.educ.uvic.cafacultymroth438CHINA chinese_new_year.html. For a short history: The Rough Guide Chronicle to China by Justin Wintle (pound;7.99, www.roughguides.com)