I am drowsing on a beach, lulled by the whisper of the sea and the soft jangle of gold bracelets. My fellow beachcombers in extravagantly casual designer clothes pass me by, pretending not to notice my Marks and Sparks swimwear. Buck House garden party meets cloth cap and muffler.

And where is this unequal sartorial contest taking place? Monaco? Bermuda? The Seychelles? No. I am on Hainan Island off the south coast of China. And 80% of my splendidly clad companions are comrades from the mainland.

You may remember it as the place where a US spy plane once crashed. Or the arena in which two Miss World contests were staged. Today, however, it is earning fame as the favourite resort of China's new rich and not so rich.

The days of the pushbike and the Mao suit are gone. With China taking its seat at the world's top financial table, the Ferrari era has arrived. And the Sanya Sheraton resort which has exclusive rights to 100,000 square metres backing up from my beautiful beach has been created for those on this remarkable gravy train. So have half a dozen other luxury hotels beside it. All are managed by foreign devils, mostly American hotel chains. But they are owned by Chinese companies.

Back, however, to the beach, where unauthorised visitors are kept at bay by security men. I lie back listening to the whine of jet skis which are hired for £1 a minute - cheap compared with the speedboat price, £1 for 32 seconds. A small catamaran costs about £20 for half an hour and wind-surfing is £11 an hour. Too dear for the likes of me, but I'm in lolling mode, anyway, relaxing with an orange juice and tuna sandwich, served by a beach waitress from the nearby Sea and Sand cafe. As I eat, I hear a harp, surely a heavenly sign. This time, however, it comes from Los Rios Latinos, a Paraguyan band which combines harp with guitar, guiro, maracas and multilingual song. A Latin American band on a beach? This Sheraton sparkles with surprises.

The hotel is vast. I walk what seems like 100 yards to the lift which takes me to my room which is big enough, almost, to play basketball in and costs £100 a night, cheap by Sheraton standards. A honeymoon suite on the ground floor with its own garden and swimming pool is on offer for about £550 a night. The Presidential suite on the top floor costs over £2,000 a night for two large bedrooms, a bar, a kitchen, an office with computer and fax, a Jacuzzi outside, a sauna inside and a piano that plays itself. There is no chairman's suite.

I take the long march back to the foyer and relax over crispy spring rolls and English breakfast tea in the Oasis restaurant, one of five and probably the cheapest, but that does not mean it is downmarket. It opens out on to an artificial lake, home to plump carp. A dozen fountains play from on high into the lake. Soft, soothing breezes waft in from the sea.

Then I stroll in the lush gardens, designed by Thai artists. Children in designer swimwear splash around in a quixotic pool which meanders around tropical shrubs and palm trees, a peaceful scene, oozing wealth and I am beginning to find it slightly overpowering.

It takes me two days, however, to break through the cosset barrier and realise that the Sheraton is not Hainan, not even China. It is California with chopsticks. So I plan my escape which involves a taxi driver tour guide, called Berlin. He drives me out of Sheraton Land, heading for the End of the Earth and the Edge of the Sky, which got its name aeons ago when the Chinese, like most other people, thought they were alone in the world. Hainan, a wild place then, was to them on the edge and at the end of everything. It acquired respectability after an emperor banished one of his officials there. The official, a spare-time poet, loved the peace and beauty of his new home and expressed his thoughts in spectacular calligraphy on large rocks he found on the sea shore. Scholars went to see them. Then they became a tourist attraction and today thousands of mainland Chinese pose in front of them for holiday snaps.

These tourists are not from the Sheraton enclosure. They are the not so rich who stay in hotels throughout the island. They have no jet skis or Paraguyan bands, but they don't care. Unlike their parents, they can afford to travel.

There is, of course, a down-side. The beauty of the End of the World remains, but not the peace. Tatty shops and stalls have sprouted, selling fast food, cheap clothes and souvenirs - shells and, sadly, coral. Raucous Chinese pop blares from a rash of loudspeakers.

After that, we went to meet the Li people, a minority race with its own language and culture. That would have been fine, had we met in one of their villages. Instead I was taken to something akin to a theme park, but less sophisticated. Deer were corralled to show what the Li hunted. A fairground shooting gallery illustrated somewhat ponderously how they killed them. I heard their music and songs which would have sounded better had they been presented live, rather than recorded. I saw one spectacular traditional dance and then Berlin took me to a cluster of houses where I was introduced to a phalanx of girls in brilliant Li costume. They invited me to go through a mock marriage ceremony with one of them.

By this stage, I was becoming uneasily conscious of the gap between my Sheraton womb and the somewhat ramshackle tourist ploys outside it. I was beginning to wonder, too, whether I would see unadulterated Hainan.

Berlin did his best for me, leaving the smooth expressway and driving slowly through a series of dishevelled villages. The villagers gave us sharp glances of curiosity because tourists, any outsiders, were novelties to them. Then we moved deeper into the country past flat, tree-lined fields where farmers in lamp shade hats were tending their buffalo herds. Would wealth trickle down from my lush base on the beach to these people who clearly could use some of it?

When I went back to Sheraton Land, I did not tell my fellow-guests from the mainland where I had been because they would not have understood the point of my journey. They saw no reason to leave their California-with-chopsticks culture. Indeed, they were paying a lot of money to stay there.

Way to go

Getting there: Middle Kingdom Travel (01242 254353) is offering six nights' room only at the Sheraton Sanya in Hainan from £595pp, including flights from Hong Kong.Flights to Hainan can be taken from Hong Kong, Shanghai and Beijing. Virgin Atlantic (08705 747747) flies London-Hong Kong from £505. Cathay Pacific (020-8834 8800) flies to Sanya Hainan via Hong Kong from £644.80.

Further information: China National Tourist Office (020-7373 0888).

Country code: 0086.

Flight time: London-Hong Kong: 11hrs. Hong Kong-Hainan: 1*hrs.

Time difference: + 7hrs.

£1= 15.09 Yuan Renminbi.