A group of Beijing's most innovative young graphic designers watch their newest work on a screen hanging in front of a mass of computers. After the screening, Jiang Jian shows me the latest edition of Plugzine, his independent contemporary design magazine, in a side studio. But the capital's most cutting-edge design names are not churning out their ideas in a downtown office complex. Instead they are working in Jiang Jian's two-bedroom flat at the top of a tower block 100m (328ft) high, one of 20 high-rises in the 700,000sqm (7,534,983sqft) Jianwai SOHO development that dominates the city's central business district and is featured in the exhibition China Design Now at the Victoria and Albert Museum in London.

Jiang Jian's Small Office/Small Home (SOHO) - a combined living and work space with floor-to-ceiling windows and sliding walls - is the trademark of Beijing's most high-profile property developer, SOHO China. The company's founders, the husband-and-wife team of Zhang Xin and Pan Shiyi, have also commissioned the Chinese artist Ai Weiwei to create 12 sculptures for the public spaces of nearby SOHO New Town, the firm's first mixed-use development. The strategy of selling a new kind of “lifestyle” architecture to affluent cosmopolitans paid off: the sale of 1,897 luxury apartments, 283 offices and 48 shops in SOHO New Town netted 4 billion yuan (£284million).

The exhibition comes at a challenging time for China, amid renewed political unrest in Tibet and a month after Steven Spielberg stepped down as artistic director of this summer's Olympics. Bagging the Games and embracing the free market mean that Beijing's property market is now “truly national”, says Chunlei Wang, the director of marketing at SOHO China. Beijing's newly wealthy may have vacuumed up these aspirational high-end pads at the turn of the century, but more than half the Jianwai apartments have been bought by Chinese big spenders from outside the capital. Chunlei says: “An owner of a coalmine in the central Shanxi province, for instance, would buy one of these apartments as a buy-to-let.”

In a controversial move, SOHO China's latest project involves revamping the 400,000sqm conservation area of Qianmen, south of Tiananmen Square, which is rich in traditional siheyuan, four-sided courtyard homes surrounded by hutong (alleyways) - although the Beijing Cultural Heritage Protection Centre, a non-governmental organisation, is concerned that the area's inhabitants are being forced out in favour of big brand-name stores.

The project is a shrewd move on the part of SOHO China. Last year a massive 3,028sqm courtyard house reportedly sold for 110million yuan in the downtown Houhai area of Beijing. Local media speculated that a Russian billionaire bought the half-renovated house, joining hot artists such as Cai Guo-Qiang and senior government officials who have also snapped up these sought-after slices of history (government data estimates that only 1,300 siheyuan remain, because thousands were demolished in the late 1970s). The current average price for a 400sqm siheyuan in mint condition is 9million yuan.

The most pressing question is whether Beijing's property boom can defy the experience of other host cities and hold up when the Olympic crowds have come and gone. “We are really optimistic,” Chunlei Wang says. “The Government has invested a lot of money into improving the infrastructure here. Beijing is still a very young international city, where property can still be obtained for a tenth of the price compared with London and New York.”

China Design Now runs until July 13 at the V&A, London SW7

Explore Property

• Buying & Selling

• New Homes

• Overseas

• Interiors

• Investment

• Gardens

• Specials

Times recommends

• Strong Euro and credit crunch impact overseas property buyers
• How to find the perfect Paris pied-a-terre
• Why the rich are looking to Latin America