That’s changing fast. Encouraged by the preponderance of mandarin collars on Italian dresses and Chinese antiques in fashionable New York interiors, more and more urban Chinese are embracing locally inspired styles once shunned as tacky and old-fashioned. Their newfound popularity is a sign of how rapid China’s modernization has been: the young, in particular–who are accustomed to Western goods and who never had to live through the years of choosing between different shades of drab green Mao suits–are the most avid consumers of homegrown products. Now a growing number of design houses in Hong Kong and the big cities on the mainland are capitalizing on that interest and challenging some Chinese design stereotypes.

Several have found a niche blending traditional style with affordable modern practicality. Singaporean designer Choon Guo sells Chinese-inspired house wares in his rapidly expanding chain of Simply Life stores, including a $30 contemporary pottery vase shaped like a qipao, or Chinese woman’s dress. In his main outlet in Xintiandi, the sprawling mall built around converted traditional Shanghainese houses, the vase has proved a best seller among the throngs of local shoppers. “Older Chinese don’t like our things,” says Guo. “To them, it is a bastardization of the pure forms. We cater to the new generation: the young, affluent customers who have had everything done for them.” ²

Douglas Young, founder of the happening Hong Kong lifestyle brand G.O.D. (which in Cantonese sounds like “to live well”), cleverly draws upon nostalgia for the pre-glass-and-chrome Hong Kong. He makes bags in a print called Yaumatei, after the Hong Kong district crowded with classic tenement housing. Young, a London-trained architect, can’t produce Yaumateis fast enough; customers filled waiting lists for weeks in anticipation of the $50 messenger-bag model. Another hit design is a print based on newspaper personal classified ads, which use food euphemisms–the Chinese slang for a prostitute is “chicken”– to get around the ban on soliciting sex. Young believes Chinese style is ripe for updating, especially by Chinese designers. “Some Western interpretations of Chinese style caricature our culture,” he says. “It is disrespectful. –Chinese design is more than dragons.”

For some, the embrace of Chinese style is infused with longing. Hong Kongers looking for a connection to the territory’s formative years are patronizing stores like MayMay King, a small shop specializing in soft toys, accessories and clothes made out of vintage Chinese fabrics. Eric Mok’s Upstairs studio is using zitan and blackwood, fine timbers much prized in Asia, to produce clean-lined contemporary furniture based on Ming-dynasty styles.

Even a company like Shanghai Tang, which has made its name selling chinoiserie to Western consumers, wants a piece of the mainland market. Next month the company will finally open a store in a spruced-up colonial house on one of Shanghai’s top shopping streets. “We have to be very innovative,” says creative director Joanne Ooi. “We don’t want to be viewed as just another seller of qipaos on Maoming Road.” Shanghai Tang’s style could be described as West meets East: contemporary silhouettes with Chinese accents or bespoke traditional outfits in fine European fabrics. The label, founded and headquartered in Hong Kong but now owned by the Swiss Richemont Group, has lately been turning out outfits that are less costumey and more wearable. And its Western cachet only adds to its appeal: a handbag design based on the auspicious Chinese character for longevity sold out in days after making an appearance on HBO’s “Sex and the City” series.

Someday soon, say style mavens, such links will no longer be required. “Fashion is fashion,” says Kou. “But after a while, Chinese will want to look back. There is no mistaking the pride that Chinese have for their heritage.” And no shortage of design firms eager to cash in.