THE RICHEST VILLAGE IN CHINA?

Long before it morphed into a city of 10m and became China's largest municipal exporter, Shenzhen – as the cliché has it – was a "sleepy fishing village" on Hong Kong's northern border.

In 1980 Shenzhen comprised two towns – the largest of which had a population of 20,000 people – and 15 former communes. The "village" so many people remember is Fishermen's Village, or Yumin Cun, a small rural hamlet situated on the banks of the Shenzhen river just a few hundred yards west of the Lo Wu border station.

Like Shenzhen, Yumin Cun has changed beyond recognition.

From a collection of huts it has gone upscale. Yumin Cun is now a gated community in downtown Shenzhen, occupying some of the most expensive land in China. Its transformation captures in microcosm Shenzhen's own shift from agricultural backwater to industrial powerhouse whose emergence made possible Hong Kong's reinvention from a manufacturing hub to global financial services centre.

Initially, the village's proximity to Hong Kong was a liability. In the 1950s a one-metre high fence was constructed, separating villagers from the river they fished to supplement meagre agricultural incomes.

As the Cultural Revolution's lunatic excesses fuelled a new wave of emigration to Hong Kong, the fence was fortified. "They made it two metres high," says Huang Xingyan, who grew up in the village. "I remember watching thousands of people running across the border." Among them were residents of Yumin Cun. Mr Huang estimates that half of all villagers aged 40 or above now live in Hong Kong.

The villagers' luck changed on August 26 1980, when the central government formally designated Shenzhen one of four new special economic zones. Their village was in the right place at the right time, occupying a prime piece of land around which downtown Shenzhen would develop.

They also benefited from a distinction between rural land, which is owned collectively by villagers, and state-owned urban land.

When seven Hong Kong factories opened in the village in 1979, their rents flowed back to the residents of Yumin Cun. By 1981 it was reckoned to be China's richest village – a distinction that led to a visit from Deng Xiaoping, the architect of China's reform and opening, in 1984.

That occasion is memorialised in a series of bronze panels depicting different stages of the village's development over the past 50 years.

In the early years of the 21st century, the people of Yumin Cun discovered a more lucrative sideline – high-end property development. Single-family homes were torn down and replaced with apartment blocks.

Like Hong Kong tycoons who occupy penthouses at the top of their developments, village families live in upper floor units and rent out lower ones. Even simple dormitory buildings, used by the villagers as temporary accommodation during construction of their new homes, have been let to poor migrants who have flocked to Shenzhen.

In total, 191 villagers collect rents from 3,800 outsiders who have taken up residence. Each village family can collect as much as Rmb25,000 ($3,245) a month from their communally-owned property company, Shenzhen Yu Feng Property Management.

In addition, about 100 villagers own shares in the community's main holding company, Shenzhen Yu Feng Industrial Development Co, which manages factories in neighbouring Dongguan. According to Mr Huang, deputy general manager of Yu Feng Industrial, the company had revenues of Rmb7m last year and paid a dividend of Rmb1.5m.