Gone are the days of no streetlights, no taxis, no parking lots and no public toilets. The district has finally been upgraded by the government to match its role as an art hub of some 400 galleries, design studios, exhibition spaces, shops and restaurants.

With its mottled red-brick walls, gigantic Bauhaus-style factory workshops and Mao-era slogans, the 798 art district surpasses even the Forbidden City as the most popular tourist destination with more than one and a half million visitors last year, according to the latest government report.

Abstract contemporary sculptures stand beside big rusty machinery, and fashion shows are held in the spacious former workshops. Every day dozens of exhibitions are launched and the district brings in revenues of 300 million yuan ($43 million) a year.

The prosperity of the 798 district came from years of struggle by numerous artists in the district. Quite a few times, the 798 compound was threatened by demolition and conversion into an industrial district. A few of the factory workshops were even razed.

Robert Bernell, the owner of Time Zone 8 Book Club, was among the first group of artists that found a haven in the 798 district in 2003. He remembers clearly the beginnings of the 798 district as a gathering spot for artists.

"There were these unique workshops. The rent was low, and we were able to freely create art here," Bernell recalls. He and other artists, like installation artist Chen Qingqing and performance artist Cang Xin, immediately fell in love with the place and moved their studios there. They enjoyed doing their art together, exchanging ideas and cooperating in holding exhibitions in this "Art Eden".

"People here are more open to our work and they respect us as contemporary artists," Wu Xiaojun says. "But in other places, such as Yuanmingyuan and Songzhuang, where established artists gather, our works are often not accepted."

By 2004, with more and more artists moving in, the 798 district became recognized as Beijing's new art center. The artists shared a collective dream of maintaining the compound's unique Bauhaus-style architecture and establishing a new cultural landmark there.

However, their landlord, the Seven Star Huadian Science and Technology Group, did not share that dream. The 798 factory compound once housed the Beijing North China wireless joint equipment factory, a subsidiary of the Seven-star group.

It was designed and built in the 1950s by architects from the former East Germany. The Germans came from Dessau, where they operated the former Bauhaus school Dessau plant as a design school with some architectural facilities.

In the 1990s, the factory began losing money and gradually stopped production.

The city planned to demolish the old factory at the end of 2005 and rebuild the district into a high-tech electronics zone. The Seven Star group would not only be able to then provide new jobs for its laid-off workers, but also get a new chance at business. In the meantime, the company just wanted to get some rent from the artists.

The artists were reluctant to eventually relinquish their art Eden and were determined not to give up without a fight.

In 2004, when Li Xiangqun, an established sculptor, was elected a deputy to the 12th People's Congress of Beijing, he submitted the first formal petition calling on the municipal government to save the art center.

The artists also organized numerous international art festivals and fashion shows to publicize their cause. In 2003, they organized "Rebuilding 798", "Blue Sky No Defense" and "Sino-German International Art Exhibition", each of which attracted thousands of visitors.

The conflict with the Seven Star group escalated.

In 2006, the 798 art district was finally listed by the Beijing municipal and Chaoyang district governments as a special "creative district and cultural park".

Not everyone is happy with the way the burgeoning art district has developed.

Zhu Jun, a 67-year-old architect who has rented a studio in 798, is disappointed with the current situation.

"The art district has really degenerated into an art theme park instead of a real Soho-like art district," he says. As the 798 district becomes better known, more people and organizations are trying to break into the area. The daily rent has tripled in three years and is now 2.5 yuan per sq m. Sometimes the price for subleasing might be as high as six yuan per sq m. Such a high rent has prevented many creative artists from moving in and most newcomers are now profit-minded individuals and art organizations.

"The district has become a fashionable spot with a fake art feel," Zhu complains. He claims that much of the artwork in the area is sold at unreasonably high prices to visitors.

Bernell thinks such change is "inevitable" and compared 798 with New York's Soho district, which has changed from an artist's haven to a prosperous art business center.

"One thing is certain: the change has begun and big art agencies and some famous brands will eventually replace individual artists here," Bernell says.

A guide to the top galleries of 798

The celebrated exhibit space provides cultural, artistic and commercial activities in Beijing's flourishing art district. Through interior refurbishment with contemporary aesthetics, the space combines the past, present and future of "New China."

Ongoing exhibitions include: pictures by renowned photographer Xu Yong with the theme of Returning Home set in Beijing's hutong alleys.

Ullens Center for Contemporary Art (UCCA)

A non-profit, comprehensive art center founded by collectors Guy and Myriam Ullens, it was the first large art organization with foreign private funding to move into the 798 area. It breaks the old mold of how an arts center is perceived and showcases the latest in China's contemporary art, design, fashion, music and multimedia. UCCA aims to be a catalyst for emerging projects in the new Chinese cultural scene. It has been regarded as a beacon for the arts in Beijing and in China, as well as a point of reference in the international art scene.

Ongoing exhibition: Our future - the Guy & Myriam Ullens Foundation Collection.

25,000 Cultural Transmission Center

A partner of the Long March Foundation of New York, the center is dedicated to experimental exhibition development and design. It is the research and exhibition center and coordination headquarters for the ongoing, nation-wide Long March project and regularly hosts solo and group shows, symposiums and lectures related to the project.

798 Photo Gallery

This is the first art gallery dedicated to contemporary photography in China. It has a professional darkroom with state-of-the-art equipment, which can produce high quality black and white photographs to meet international standards.

Timezone 8 Art Books

This chic art bookstore sells art, exhibition and design books from a range of Chinese and international publishers, including its own Timezone 8 label.

Iberia Center for Contemporary Art

Established by the International Art and Culture Foundation of Spain, Iberia collects and researches Chinese independent film and video work. The space includes an exhibition area, media archive, independent film archive, public education center, publishing house, cafe and art shop.

Ongoing exhibition: World Record: Art & Sport, which traces the history of sport in different art mediums.