The modern and ancient merge in timeless Hanoi

Just after dawn around the perimeter of jewel-like Hoan Kiem Lake in the city center, hundreds of citizens gather daily in orderly clusters to tone their bodies and spirits for the future. Tai chi, touch-the-toes or Taoist meditation — whatever works.

Some of them stretch their limbs beneath a glitzy new video billboard that counts the days until 10-10-10 — Oct. 10, 2010 — when the city will celebrate its 1,000th birthday. Others choose the entryway to Ngoc Son pagoda, which dates to "time immemorial," according to a plaque. After their session, a few will drift to the Old Quarter, perhaps to a job at a Wi-Fi café or to join tourists in placing offerings of candy and beer at the ancient White Horse temple.

Time, timing, timelessness — all are heightened in Hanoi at this moment in its history. The steady pulse of the video calendar, the boom-boxed beats of the exercise soundtracks and the incessant putt-putt of the motorbiking hordes flowing past new luxury hotels and construction sites signal that an ages-old culture and a young and recently robust capitalist economy are marching toward modernity.

But elsewhere in this city of 3.1 million, which functions as Vietnam's cultural center and is the seat of the cautious communist government, time creeps along or gets stuck or appears to be weirdly warped. Strange and sometimes terrible reminders of a beleaguered, war-torn past linger here amid oases of serene Red River Delta beauty. And therein lies the attraction.

"Hanoi is so beguiling because it is a city of contrasts," says Ngoc Huu, 90, one of the country's best-known writers and cultural historians. "It is interesting to follow its mutation from the old into the new."

That evolution is increasingly drawing the attention of the outside world. Like the rest of Vietnam, Hanoi is enjoying an international tourism boom and the benefits of an economy that has grown by 8% for three straight years. The city drew 1.3 million foreigners last year, an increase of 13% from 2006, and a recent government study predicts the 10-10-10 festivities (details are still under wraps) will bring in 2 million international visitors and $1.7 billion in tourism revenue.

Recent double-digit inflation may temper some of the building plans, which so far include the construction of five more luxury hotels, numerous monuments and a high-end shopping mall. But the momentum is formidable, and astonishing, given that the country had no tourism and was on the brink of famine in the early 1980s before economic reforms and the normalization of relations with the United States in 1995 sparked the current growth.

Ho Chi Minh City and some of coastal resort areas already have been transformed; Hanoi is poised to follow, though in a different way and at a slower pace.

"Ten years from now, everything will be completely new," says Christian Pirodon, the general manager of the just-opened InterContinental Hanoi Westlake, a chic waterside outpost that just made Condé Nast Traveler's annual Hot List. "The willpower of the people here is so strong, what they want to achieve and where they want to go."

Such bullish forecasts are increasingly common within the hospitality industry, but they also alarm those who believe that Hanoi's most important role is to shape and preserve the national identity.

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