The new luxury hideaway for China's reclusive leaders lies on a secluded beach on the southern most tip of China on Hainan Island. After the Gloria Resort Hotel opened in August, politburo members and presidential guests have come to laze under coconut trees and paddle in clear tropical waters. This year alone the US$50 million (about HK$390 million) Hong Kong-managed venture has twice welcomed Deng Pufang, the eldest son of Deng Xiaoping. 'We built ramps and other facilities for his wheelchair,' said its Portuguese general manager Mario de Sa Pereira who recalled that he came with an entourage that took up a whole floor. Li Ruihuan, the former building worker who is now one of the seven members of the politburo standing committee, spent a winter holiday there as did politburo member Tian Jiyun and others besides, all who went to escape the capital's cruel winter and bitter feuds. So impressed have China's leaders been with the hotel designed by Hong Kong businessman Kam Hung that they are using it to entertain state guests. The presidents of Kazakhstan, Tajikistan and the Comores Islands have already stayed. Nursultan Nazarbayev, the Kazakh president, and his delegation spent two weeks in the hotel before arriving in Beijing after Deng Xiaoping's death to become the first foreign leader to meet President Jiang Zemin. 'We are now building a separate and private presidential cabin with its own pool,' Mr de Sa Pereira said. The hotel on Yalong Bay was designed by Mr Hung, president of Gloria International Hotels, owned by two Hong Listed concerns, Top Glory International and China Foods, who said he was inspired by the Waikiki resort in Hawaii. His 400-room four-star hotel is a far cry from the modest single-storey guesthouse on the East coast where Jiang Qing and other members of the elite spent their winters during the Mao era. And it outclasses the colonial era villas at Beidaihe on the coast of Hebei province where Deng Xiaoping used to go each year. 'Of course, this cannot replace Beidaihe, where the leadership holds its summits during the summer, but this is the place to go to escape the northern winter,' said Mr Hung who has spent much of his life working in the United States. The entire eight-kilometre bay, once a secret naval base, has been leased for 70 years to the Yalong Bay Development Corporation whose major shareholder is the wealthy Chinese state trading company, COFCO - the China Cereals, Oils and Foodstuffs Corporation. COFCO bought the company after the other shareholders went bankrupt when the island's property boom crashed a few years ago. All around the eastern coast stand the concrete witnesses - half finished buildings and unsold villas - to the heady optimism and cheap loans of 1992 and 1993. Along the bay the company is now trying to restart a golf course project next to the hotel and set up a butterfly park, a shell museum, restore a traditional village as a museum and create a waterworld with the world's largest water slide. Further along the bay, work is going on to complete other hotels. Eventually there will be hotels with about 5,000 rooms. 'It will be popular because a lot of wealthy Chinese who want to enjoy the sun and sea cannot always get visas to abroad,' Mr Hung said. Even for those who can, the hotel with its breezy verandas overlooking the beautiful bay, exerts a strong pull. China's foreign ministry brought its ambassadors from all over the world for a meeting here. And on Saturday, the party secretary of Hainan Island, Ruan Chongwu could be seen dressed in whites playing tennis with the governor of South Korea's Cheju Island. 'The rich and powerful now play tennis, but golf is going to be bigger, it is more prestigious,' explained recreation manager Kyaw Kyaw Than. Two golf clubs have already been built on the island although few can afford to pay the exorbitant fees demanded. Hong Kong advisers, as they were then known, enjoyed the sun and the sand in between discussing more serious matters with Zhou Nan and Lu Ping when they met 20 kilometres down the coast at the bigger resort of Sanya in late 1994. And while they had Hong Kong's future on their minds, other visitors to Sanya are interested in a different type of pastime. 'This is China's sex capital,' boasted taxi driver Ah Men, one of the handful of locally-born people who have seen this former fishing village grow to a town of 300,000 in just a decade. 'There aren't any official figures on the number of prostitutes here,' he explained without irony, adding, 'they are everywhere you look.' Heavily made-up girls walked the streets or patrolled the beach openly propositioning. Others lounged in hotel lobbies or loitered at the entrance to the night-clubs within each hotel. On the streets a whole quarter consisted of garishly lit shops where groups of girls waited for customers. 'Most of the visitors to Sanya are male. Chinese companies seem to hold a lot of conventions and meetings here,' said a Hong Kong traveller familiar with the city. 'Hainan's failure to develop an export processing industry has led it to promote tourism as the key growth industry. Sanya now has a fast highway linking it with Haikou, the island's capital, and has opened an international airport which serves charter flights from all over the region. The hotel industry is dominated by locally invested and generally low-price hotels. Most locals say the prostitution is deliberately tolerated by the officials who have been to Thailand and want to encourage the speedy growth of the tourism industry. In the night-club at the Hawaii Hotel, girls sit in the semi-darkness accompanying guests who watch with delight a variety shows which consists of Taiwanese love songs crooned by a lady in a white wedding dress. Many of the guests are apparently soldiers who generously applaud the next act, a fat and thin man duo who quote Chairman Mao on building socialism and sing 'it is fine to be soldier'. The biggest applause is reserved however for their skit in which the fat man, who dresses up as a Japanese officer, is humiliated by the other in a re-run of the anti-Japanese war of resistance. In the more expensive Mingri Hotel, managers in dark suits greet guests at the door asking 'what kind of girl would you like?' Drinks and tips are far from cheap but on the other hand receipts for office expenses are provided on request - just tell us how much to write down, the waitress said. Inside, everyone reclines on cream leather sofas watching a variety show act which has aspirations to imitate Las Vegas. Squads of girls in swim suits parade up and down, but top of the bill was an energetic song and dance act put on by six transvestites all in pink. 'They are just as good as those from Thailand,' declared one of the staff. Their act is, he says, more popular than the striptease shows which have recently been closed down in Sanya. Locals argue that other visitors are not outraged at holidaying this Sodom and Gomorrah with Chinese characteristics. 'They think it is just another special feature of China's largest special economic zone,' taxi driver Ah Men said. Meanwhile back at the Gloria Resort Hotel, manager Mr de Sa Pereira says it is difficult but important to keep his hotel clear of prostitution. After all, many of his ranking guests will have come from Beijing swearing support for President Jiang's spiritual civilisation campaign. 'It is naturally difficult for the staff to question the identity of the women who come in with our male guests. Yet some guests complain, because they have been woken up by girls knocking on their door in the middle of the night,' he said.