: Travel - Destination Capitalism.

Byline: Andrew Forgrave

EVEN today, Hong Kong continues to entertain and baffle: a collision of Eastern logic and Western excess, where designer labels jostle with oriental traditions to create a culture which is quite unlike anywhere else on Earth.

I used to live in Hong Kong and, on a previous return to the country in 1993, I found it barely recognisable from the Suzy Wong stereotype of the early 1970s.

Returning again recently, my old home had changed again: more concrete but also with the post-colonial exurberance and confidence of a free market economy eager to move on from its British imperial past.

Following Hong Kong's 1997 handover to mainland China, tourism dipped noticably amid uncertainty over the Chinese government's intentions for its new acquisition. Five years on it has become clear that, for the time being at least, Hong Kong is to be allowed to steer its own course. Confidence has quickly returned, and so have the visitors: the country, already a major tourism player, now aims to become a top five global destination.

Many visitors, inevitably, will arrive from the mainland: already millions of starry-eyed Chinese in smart grey suits come to gaze at Hong Kong's miracle of capitalism, just like the Westerners who wander through neon-heaven Causeway Bay, with its sleek Japanese department stores and funky boutiques.

Here, prices of clothes and electrical goods give lie to Hong Kong's reputation as a bargain hunter's paradise. Everything is here but the price-conscious must look elsewhere to the street markets and corner vendors, who pop open briefcases and sell watches for a couple of quid.

The most famous of Hong Kong's street markets is the Temple Street Night Market.

Here you'll find everything from ball-point pens with built-in alarm-clocks to button-hole spy camaras. Fake designer goods too, though since my last visit the authorities have nominally clamped down. So expect to buy Cucci handbags and Saving Private Bryan DVDs.

For the fleeting visitor, Hong Kong has its must-see attractions. The waterfronts, viewed either from the Kowloon peninsula or from Hong Kong island itself, are shimmering cliffs of steel and glass which undergo personality changes at night: like chameleons, their colours emerge as half the world's neon springs to life.

But it would be a shame to stick rigidly to the grieviously-worn tourist trail. Hong Kong supports an almost intact traditional Chinese culture which, with minimum effort, can be sampled and consumed. In early morning Victoria Park, a patch of green hemmed by the monoliths of Causeway Bay, pensioners serenely carve centuries-old tai chi moves in the air.

And at Man Mo Temple, the oldest in Hong Kong, visitors can peer through acrid incense to witness daily scenes of worship. Fortune sticks are shaken for guidance and fat wads of fake money are burned in huge cauldrons to appease the gods, leaving an unforgettable impression.

Take time too to try out local cuisine, said to be the world's most cosmopolitan. Dim sum and tea is not so much a meal as a cultural experience. Restaurant prices aren't as cheap as they used to be, but there's always the dai pai dong street stalls.

Just as fascinating are the specialist shops and stalls which sell a mind-boggling array of dried products, mostly culled from the sea. Better still, catch the ferry out toCheung Chau, an outlying island. Then take a sampan ride round the typhoon shelter (the second largest in Hong Kong, after Aberdeen), before pigging out on seafoodyou've chosen earlier from rippling tanks of bug-eyed fish and crustacians.

Cheung Chau is just one of 236 islands which make up the country of Hong Kong. And there's the irony. Despite being one of the most densely populated places on earth, 70pc of Hong Kong is actually covered by forests, farmland or mountains. It doesn't take much to get away from the frenetic bustle of urban Hong Kong to find a more indolent side of Chinese society.

For many Chinese, a weekend away often means a trip to Macau, an hour by high-speed hydrofoil. Macau ranksalongside Las Vegas as a global brand in the shirt-losing business. One casino is modelled on a vampire, an open gesture tothe way it drains the blood from its victims. Four out of five Chinese bet, from football scores to Mahjong, and one in 50 is classed as a pathological gambler. Macau's casinos are not for the faint-hearted: Hong Kong's magnificant Happy Valley and Sha Tin racecourses - more like football stadia - are far more indolent places to lose money.

facts

Economy return flights with Cathay Pacific, departing London, are priced from pounds 525. Call 020-7747 8888. Andrew Forgrave stayed at the Park Lane Hong Kong, Causeway Bay, Hong Kong island. Prices start from pounds 84 per room. Breakfast costs an extra pounds 15 per person. Call 00 (852) 2293 8888 or visit www.parklane.com.hk Prices at the Grand Stanford Inter-Continental Hong Kong, Kowloon, start at pounds 125 for a city view room. The price includes breakfast and all tax and service charges, based on two sharing. Call 00 (852) 2721 5161 or visit www.grandstanford.com A room at the Mandarin Oriental hotel in Macau, including a buffet breakfast and all tax and service charges, will cost from pounds 101. Call 00 (853) 567 888 or visit www.mandarinoriental.com Hong Kong Tourism Board: 020 7533 7100 or visit www.hktourismboard.com Macau: 020 7771 7006 or visit www.macautourism.gov.mo