AT A fruit shop near the Bell and Drum Tower, a shopkeeper and some children are watching the Chinese gymnastics team on television. This is down in the Dofuchi quarter of the fabled hutongs, the ancient Beijing tenements and back alleys that are like a maze of wormholes, date back to the early 20th century and are alive with the sights and smells of the China of popular imagination.

As the world began to pay attention to Beijing over the past couple of years, it was widely reported that many of these teeming courtyard dwellings had been razed to make space for the gleaming glass towers that began to spring up like night mushrooms in the Beijing haze. The outside world tut-tutted about the cold and unsentimental clearing of these old-world dwellings, which formed a million villages within the biggest city in the world.

But the Dofuchi hutong is sacrosanct because it is here, in a plain stone dwelling marked by the simple numeral 15, that Chairman Mao's mother was raised. The landmark would be difficult to find without a guide - even Chinese tourists were being escorted to it on the rickshaw bicycles, standing with hands respectfully joined as they posed for photos outside the front door.

It is a tiny, overwhelmingly modest homestead, identical to thousands of others in which people still make a living from universal trades like carpentry or collecting rags and old iron, which they stack neatly along the alleys outside their doors. How odd that a woman who grew up on this busy side street should have produced a son who now lies in state in a mausoleum that is the size of a small ship.

Yards from Mao's place, a middle-aged man wearing a vest and shorts sits on his steps and surveys his world with a sleepy gaze. The pace of life here is wonderfully unhurried. Nobody is inclined to move fast in the breathless heat, and at every turn are locals in conversation on the street, much as in the Ireland of 20 years ago.

In the deep interior of the hutong, the sounds of the gymnastics hall can be heard. The Chinese girls are winning.

Outside the open-front shops, people casually stop to observe on television screens the progress of the national team, who are destroying the feted Russians and Americans with flawless routines on bars and floor. The local audience is curious rather than passionately nationalistic. It is too hot for full-on patriotism.

The young man keeping shop smiles encouragingly as he sells a bottle of iced tea, which he manages to vend while remaining on his stool, slumped over a bed of huge, ripe watermelons. He nods enthusiastically and cheerfully points at the television, a gesture designed to explain that China is about to win another gold.

Beijingers are well accustomed to international visitors taking snaps of their backyards as tokens of authentic Chinese culture and of seeing tourists strolling around the front court beside the Bell Tower, another monument to the Ming dynasty dating back to the late 13th century. It was here that Todd Bachman, an American tourist with Olympic team connections, was stabbed to death on Saturday in one of those random acts of mindless violence that can happen anywhere. So for now, the landmark has been sealed off, with signs reading "temporarily closed".

China Daily, the English-language mouthpiece of the state, buried that story deep in its pages and one wonders how much the local people know of the fallout it has caused. One wonders too if they are aware of the Chinese whispers that have been racing through the foreign quarters of Beijing about the athletes on their gymnastics team.

Like most gymnasts, the Chinese girls appear worryingly gaunt and possess that weird combination of childishness and lightless, old-beyond-their-years eyes that tells you all you need to know about gymnastics regimes.

Three of the Chinese gymnasts have had the legitimacy of their ages questioned and it was noted that one of them appeared to be missing a baby tooth.

Bela Karolyi, the famed Romanian coach and no stranger to controversy, was among those that queried the Chinese credentials. And the suspicions will probably grow if the Chinese start cleaning up in the more prestigious individual events.

But what does the age of a sequined gymnast matter if your day is about cleaning and presenting fruit for sale or cycling around gathering empty bottles of Yanying beer for recycling? (The Chinese make western habits seem criminally wasteful; they find a use for everything.)

And why would they care about the trivial suspicions of visitors when they have grown up in a culture of asking no questions?

For all the friendliness of the Olympic volunteers and the Beijingers, the State officials are never too far in the shadows, always watching and writing their notes and reminding you that China is not like everywhere else.

And Dofuchi is like nowhere else. After a week in Olympic City, where size is everything, it is a relief to be watching sport in a commercial shack, with tinned products and boxes of cigarettes and cold beers and no logos.

In the breathless and jubilant communiques of state, the day-to-day story of the Olympics is of gathering glory for the Motherland in a bewildering variety of Olympic sports and of the citizens smiling and waving flags and dancing in the stands.

The message is no different from what was delivered in Los Angeles or Atlanta or Sydney of Athens, and it is transmitting a sense across the vast provinces that in this global circus of sport and power China is the envy of the world. And you look down at two five-year-old boys in the street playing with a plastic water toy in a bucket while on television girls officially just 10 years older turn tumbles and arabesques of perfection and you wonder about the next generation of stars from the People's Republic already in training for London.

On the main street leading away from the Bell Tower, there are signs of the modern world closing in on the last vestiges of traditional Beijing life. Young Chinese entrepreneurs, little more than school kids, are working in funky hair salons and fashion boutiques, one of which has the entire back catalogue of Michael Jordan basketball shoes, available for 2,000 yuan, or a couple of months' salary for many Beijingers. It is pop music that emanates from these shops, not the rapturous cheers of the fans in the stunning arenas the Party has had built for these Olympics.

As the Chinese gymnasts waved to their families in the stands, the boy in the fruit shop roused himself from his display and chatted with friends and stood in the noonday warmth, looking out on a view that will form his world long after these fizzing Olympics have ended.

And the funny thing was, seeing the Olympics for the first time on a halfway human scale - on a portable television - made it all the more difficult to go back out to Heartbeat City itself, the city of Rings and Dreams and Glory.

When you watch even a few minutes of the Olympics in the company of those who still trade in raw materials and discarded belongings, you cannot escape the fact there is something genuinely insane about the Olympic Games, this certified dream machine and myth maker whose light reaches into the even the half-forgotten living rooms of old Beijing.