The 100-square-metre area scheduled for demolition is on the market's eastern wing and is known as Xiushui. It is popular with foreign tourists and expatriates and is famous for selling knock-offs of western fashion brands.

The man who leases the space said he would leave the market before Wednesday and the 23 shops under his management would be demolished to make way for a shopping mall.

He said the land had been contracted to him in the 1990s by the Jingkelong company and that plans for the mall had prompted Jingkelong to scrap the contract months before the agreement was to expire. In return the company had offered compensation.

'The shopping mall said I was in its way - encroaching on its space - so they wanted me to move out.'

Work on the mall began in the summer and backers of the new shopping complex have already auctioned stall spaces.

One bid was 13,000 yuan per square metre per month, a record for retail space in Beijing.

One month after the auction, Chaoyang district government - the administrative authority that oversees the area - held two forums to discuss whether to demolish the open-air bazaar.

Four government departments proposed pulling down the market, citing fire safety issues and its proximity to nearby embassies.

But there has been resistance. Stall owner Zhu Dingya said pulling down Xiushui would be a psychological blow to the shopkeepers.

'They are trying to alienate us,' he said.

Mr Zhu said the owners had not received any official notification about the market's destruction and their goal was to preserve the bazaar.

'The main thing is that the mall's developer doesn't want to leave us alone while they do their business,' he said.

'They want to evict our market and absorb us into their expensive shop units.

'If that day really comes, we'll discuss how to protect our interests.'

On Monday, the characters for Xiushui Street were erected on the site of the partially constructed mall.