AIMEE K. WILES SHANGHAI * Hundreds of cranes pierce the polluted air that hovers over this city of 16 million people, the hotbed of China's economic boom. The epicenter of growth is the Pudong District, seen here from the Nan Pu Bridge across the Huangpu River.

Kodak executives attribute their success to four bold strategies: building a trusted brand that resonates with Chinese consumers; establishing close working ties with the Chinese government; opening new manufacturing sites; and showing a willingness to break the rules.

That last strategy may be the most important. Kodak China exudes an energy that makes it seem more like an entrepreneurial start-up than part of a sluggish, 120-year-old corporate behemoth.

Executives and managers all carry mobile telephones that constantly ring. David Swift, chairman of Kodak's Greater Asia region, carries two. Some meetings are scheduled to start as late as 10 p.m. Decisions get made quickly, sometimes within an hour after an issue surfaces.

The mobile phones are emblematic of the get-it-done-right culture that forms Kodak China's central operating principle. ''Just because it's something we have done, don't assume that's the way it should be done,'' says Swift, who will begin his fifth year in China in December. ''Let's make sure we do it right. Don't just reinvent what's been done elsewhere if it doesn't make sense.''

Express delivery

Armed with the freedom to invent, Swift and his staff have turned Kodak China into a laboratory for new ideas -- with outstanding early returns.

AIMEE K. WILES XIAMEN * A Kodak Express retail store, now amid construction rubble, soon will be surrounded by new buildings as the former military site is developed into a high-tech zone. The Express stores in China are booming: Kodak aims to have 8,000 by year's end.

The China operation last year increased revenues 36 percent and profits 58 percent even amid the Asian financial crisis. By comparison, Kodak's worldwide revenues grew just 5 percent, its operating earnings 13 percent.

The I-think-I-can energy crackles in the company's ever growing and changing network of Kodak Express retail stores. Even while expanding toward its goal of 8,000 stores by year's end, Kodak has vowed to redesign merchandising concepts every two years. The reason: to motivate marketing and sales teams to keep reaching for the next great idea.

The latest version of the Express store may be the most dramatic shift. Kodak expects to open 10 to 12 ''imaging centers'' this year that emphasize digital photography and come in space-age silver and blue rather than Kodak yellow.

The Express stores, refined four times since 1994, are due for a fifth change early next year. The original versions were mere drop-off sites for film; the latest have a warm ambience that encourages shopping for frames and other accessories.

The notion of constant change keeps staffers from getting too comfortable, said Antonio Lee, general manager of retailing for Kodak China. ''Once you say, 'Introduce new concepts,' you change the mindset.''

Most of the Express stores today are clustered in major cities and large provinces on China's east coast. Yet about 71 percent of China's population -- about 900 million people -- live outside the cities in rural areas.

So Kodak is experimenting with ways to lower the cost of store ownership. All Express stores are owned by individuals, though Kodak provides extensive training and marketing support.

One idea calls for Kodak to open Express stores in Chinese post offices. Many of those stores would serve simply as drop-off points, with the film sent to larger stores for processing and returned in the mail.

Owners then would not have to invest in costly photofinishing equipment, said Anthony Lee, general manager of consumer imaging for Kodak China. (He is not related to Antonio Lee.)

Another idea, to be announced soon, is to offer would-be store owners mortgages through the International Commercial Bank of China, the country's largest. The mortages would be secured with the photofinishing equipment.

The program has enormous significance culturally, since China is a cash-only society. ''It is not easy to get credit,'' said Lee, who has been running consumer photography in China since 1997. ''This is a real breakthrough.''

Kodak hopes both programs will fuel an Express expansion to less populated areas.

The success of the stores has extended Kodak's reach while weakening competitors. Some 1,200 to 1,500 of the stores are owned by people who formerly ran stores for Fuji Photo Film Co. Ltd. or other competitors.

From the sound of it, Kodak needs to penetrate the more remote areas simply to improve recognition of its brand name and reputation. Take Zhang Xingyuan, 49, who has been selling cold drinks, souvenirs and film to tourists at the Great Wall of China for the past 10 years.

Zhang lives in a village about two miles north of the Mutianyu section of the wall.

The vendor was surprised to learn recently that Kodak film was not made by an Asian company. ''I thought it was Korean,'' he says. Curious, he goes to his stand to read the labels of both Kodak and Fuji Photo film boxes.

''Is Fuji made in America, too?'' he shouts.

Making the leap

Zhang is one of the people Kodak thinks it can reach if China is admitted to the WTO. His income has increased in recent years as more tourists explore the wall, but he still hasn't bought a camera.

Currently only 15 percent of Chinese households own a traditional film camera, up from about 11 percent four years ago. Kodak's plans for boosting that percentage depend largely on China joining the world's trading club and then easing import duties and other restrictions on foreign-made cameras.

The restrictions to date have made it difficult for Kodak and other camera makers to sell low-cost, high-quality, entry-level models. Kodak's research shows that once consumers shoot their first roll and get good results, they use increasing amounts of film.

Kodak's low-cost models have met with good results in other markets. The company, for instance, owns the No. 1 point-and-shoot camera in India, a basic 35mm model that sells for $15. Although the camera is made in China, it has not been approved for sale there.

The WTO agreement also would lower tariffs on digital cameras, which Kodak has begun selling in China despite the low penetration rate for film. Chinese consumers, with more disposable income to spend, are showing a preference for the latest and greatest technology -- a phenomenon known as ''technology leapfrog.''

Leapfrogging has been most vivid in mobile phones. More than 43 million people in China owned cell phones last year, an increase of almost 100 percent from the year before. By comparison, China has only 109 million wire phone line subscribers, according to International Data Corp.

Kodak's venture into new technology extends beyond cameras. The number of Internet users is doubling in China every six months and is projected to exceed 100 million in the next four years. So Kodak is negotiating with several Chinese dot-coms to help them build photo e-mail, processing and related services into their Web sites.

AIMEE K. WILES SHANGHAI * Antonio Lee, general manager of retailing for Kodak China, stands in front of a new Kodak Image Center, which focuses on digital products. The centers reflect Kodak's plan to redesign merchandising concepts every two years. ''Once you say, 'Introduce new concepts,' you change the mindset.''

Swift says he gets ''three to four'' calls a week from sites such as Sina.com and Etang.com. ''If we don't move quickly,'' he says, ''we run the risk of having to play catch-up. And we've got great permission now, because of our brand strength, to capitalize.''

The game of leapfrog results in surprising contrasts. About 90 percent of Chinese households own television sets, but only a third have private toilets, Swift says, quoting Gallup Corp. data. ''I've told my friends I would gladly give up every television set I own to have a toilet,'' Swift jokes.

Anecdotally, there are signs that Chinese consumers understand the benefits of digital. Gao Junxiong, 39, an electrical engineer, has been using a Fujifilm digital camera for about a year. He likes it, he says, because he can e-mail pictures to his friends both inside and outside China.

Gao continues to use a traditional film camera, but digital is exciting for customization and immediacy. ''I like using the digital because I can adjust the colors myself,'' he says, snapping pictures while on a tourist boat to Gulangyu Island off the coast of Xiamen.

Layoff culture

As it harnesses business opportunities such as those in digital, Kodak is also introducing serious cultural change to its growing work force. The company employs about 5,700 people in China, up from only 74 six years ago.

Many of those employees used to work in enterprises owned by China's communist government, where jobs are practically guaranteed and the work place is dominated by supervisors. At Kodak, a profit-driven company, individual performance counts yet cost-cutting layoffs are never ruled out.

The transition isn't easy, as some employees already have learned. Besides the 4,000 jobs lost in the industry reform partnership with the government, Kodak laid off 450 people in Wuxi when it closed an older photo chemical plant.

The cuts fed more people into an already raging unemployment problem in China. Official estimates suggest that some 15 million people in cities and 130 million people in rural areas are without jobs. In the past, large-scale unemployment has led to social unrest.

Kodak will be further challenged if China makes it into the WTO. Swift says he expects that other foreign companies that invest in China will try to hire away Kodak employees already trained in the ways of western business.

For now, the company is trying to make sure employees don't get overly concerned by the threat of unemployment. It's hard for some not to feel the stress.

''We have a more stable salary, but now we suffer big pressure of getting laid off,'' said Zhirong Guo, a handler at the Xiamen factory. He got a 20 percent raise, amounting to about $20 a month.

''If I don't work hard here, I will be laid off. And . . . that's not so pleasant.''