Lao She is a satisfied man. Life has not always been easy, but now he has plenty to show for his efforts.

In 1941, after Japanese troops occupied his homeland, he picked up a gun and joined the communist underground. No longer would his village be totally at the mercy of marauding Japanese troops. "Once two Japanese soldiers came to village for our women. We jumped them and knifed them."

Now almost 60 years, Lao She is a quiet man, but he doesn't mind talking about his war exploits, because they paid off handsomely. Last year he built a brick house on a piece of land that had belonged to a village landlord. bHe lives there comfortably with his children and grandchildren, a living reminder to people here of the individual courage and sacrifice that brought the Communist Party to power in China, and with it, socialism to this fairly typical Chinese village.

Socialism is no longer something new for the peasants here. Twenty-four years have passed since land was collectivized, and young people -- the strong and able-bodied -- have labored under no other system.

As part of the first wave of Sino-American cultural exchanges, I came to Dahe in early January for a six-month stay to observe China's socialist agriculture first hand. My project is to collect numbers and talk to people to assess how effective the collective system has been in meeting the challenges of modernization.

Dahe is about 200 miles southwest of Peking, in the heart of the densely populated north China plain, where peasants pit themselves against the arid climate to eke out a living from wheat, corn and cotton.

Winters are not harsh, but they are bleak and colorless. Each day, winds swirling down from Mongolia pick up loose dirt and deposit it on the village streets, some of which were just recently paved. In the morning, as I run through the village for daily exercise, I hold my breath and plunge through heavy clouds of dirt kicked up as villagers sweep the streets clean.

The division of the village into "sanitation districts" is just one sign of the layers of tight organization that now penetrate China's countryside. Another is the sound of bells that wake me early each morning as production teams -- China's units of collective farming -- call their members out to the fields. As the summer approaches, these bells ring earlier and earlier in the morning, followed quickly by loud Chinese opera or marching music blaring over the village P.A. system.

But all of this busyness has paid off in Dahe. In this society, where peasants continue to measure success by what they are able to put into their stomachs, Dahe has fared well recently. Unlike many places in China, villagers here have had plenty of grain to eat.

I still cringe at its ferocity, but the sound of screaming pigs about to have their throats slit is a happy one in the ears of the villagers. Grain is plentiful. After filling their own bellies, there is enough to feed pigs. Families sell most meat to the state purchasing station, but now they can afford to eat some themselves.

During this year's lunar New Year, families feasted grandly, but the regular diet here is still pretty bleak. Mainly it is composed of noodles and steamed bread. In the winter there are some cabbage and salted vegetables and in the summer a few fresh ones, along with a little meat once a week or so.

I always get a kick out of asking the village's cheerful septagenerians what they just had for lunch. "Noodles!" they say, with broad, toothless smiles of satisfaction. Noodles of white wheat flour were once a luxury that few of them could afford; only occasionally did they liven up a daily repast of coarse grains and sweet potatoes.

Recent prosperity also shows in the free markets which made a resurgence throughout China after the government relaxed controls a year ago. Dahe's market spills all over the main street of the village every five days. At one end of the street peasants sell sides of pork or lamb. Next to them are grain dealers. Only two years ago, private grain sales were strictly forbidden, and black market prices exorbitant. With open trading and plentiful supplies, the free market price now only slightly exceeds the official state price.

By 11 in the morning, I have trouble pushing my way through the crowds. Dentists peer into open mouths on the street corner. A barber shaves a glistening head under a brick archway. One hawker beats loudly on a brass gong, and chants a verse extolling the virtues of his home-made rat poison. Scores of rat carcasses heaped at his feet provide proof of his product's effectiveness. Local painters hand up huge portraits of tigers for sale.

"How much is that tiger?" I ask.

"Fifty cents." I feel embarrassed even to think of bargaining, although no one else does.

The state marketing organization sets up long tables stacked with bolts of brightly colored cloth, for which purchasers must still produce ration coupons. Seamstresses rhythmically pedal up and down with their feet as they feed cloth into machines by hand

Just before the New Year, the far end of the street was pure bedlam as peddlers selling fireworks demonstrated their wares to the delight of throngs of screaming children. Rockets fired overhead exploded, showering shreds of newspaper everywhere, and clouds of smoke billowed up as a peddler touched a punk to a string of firecrackers hanging from the end of a pole.

Local officials apologized to me for the lack of festivities this year. But since last spring there had been no substantial rain, and a cold snap killed much of the winter wheat. The villagers had to pick up their shovels early and go out to irrigate and fertilize the fields -- no time left to play, not even for the amusement of their foreign guest.

As I bicycle to other villages to interview officials and hand out questionnaires, I pass teams of peasants operating mechanized wells, a recent innovation that will save this year's crop. But irrigation is time-consuming, laborious work as the teams meticulously demolish and reconstruct dirt walls, directing the flow of water into one tiny parcel of land at a time. These half-modern methods have increased yields dramatically, but they haven't increased income much. I asked Wang Guochun, head of the village production brigade, why.

"We never paid attention to production costs. We used expensive fertilizer, insecticides and machinery, which cost more than the extra income they produced."

"But how could you ignore production costs?"

He shook his head. "You don't know what it was like these past years under the 'Gang of Four.' They demanded more grain. If you started to worry about production costs or economic accounting they would accuse you of 'putting economics in command' or of 'restoring capitalism.'"

"But what have you to fear?"

Wang leaned forward and patted his shoulder with his right hand. He looked me straight in the eye. "I am a Communist Party member and I believe in socialism. If my party comrades accuse me of restoring capitalism, it is more than I can bear."

It is through individual confessions like Wang's that I have begun to understand how four now-deposed party leaders could have wreaked such havoc throughout China's huge bureaucratic machine. But now Wang looks forward to a prosperous future:

"In the future, all of the farm labor will be performed by a few men and women with large machines. Insecticides will be applied from airplanes. Everyone else will work in small factories in the village."

These factories, which manufacture bricks or process clothing, now provide a good portion of the village's income. To me they look like a modern day revival of 19th century industrial oppression, with dim lighting and minimal safety equipment, but villagers love them because of the extra cash they supply.

With progress and modernizaton the key words for the day, people always ask me about American agriculture. The questioning inevitably starts like this.

"How does your government organize agricultural production?"

Well, uh, it doesn't." My questioners look at each other as if I hadn't understood the question.

"But what kind of organization tells them what to plant and how to farm?"

"No one organizes them. No one tells them what to do. Many farmers are university graduates and they just farm they the way they want to."

My questioners ponder this for a moment. I could never adjust to working inside of China's tight, restrictive organizatons, but my hosts have trouble even imagining life without an organization to take care of them.

"One American farmer alone can cultivate as much land as your whole village by using big tractors and other machinery."

At this remark, sighs of envy fill the room as they ponder the immensity of China's problems.

"We can't afford such large machinery, and we would have no way to keep everybody employed. We have too many hands to keep busy."

Everyone now recognizes the terrible cost China has continued to pay by letting population growth slip out of control in earlier years, and village leaders are now starting to get tough about it. The new goal: one child per family.

In spite of wide understanding of the population problem, this is a bitter pill for many young couples, for whom sons are economic insurance in their old age. He Xingzhou, head of the commune family planning drive, tells me, "Prinicpally we rely on propaganda and education, but this is not enough. We need to have rewards and punishments."

The rewards include bonuses spread out over 14 years to families who pledge to limit themselves to one child. Those who give birth to a second child face severe penalties that would cripple most family budgets. Recently married myself, and with an eye on having two children, I shiver at the thought of such pressures. But, accustomed to having so many aspects of their lives controlled by the state, many Chinese went right along with the new policy.

Says Wang Junmei, head of the village Women's Federation, "Most couples waited at first to see what others would do. The Communist Party and Communist Youth League members pledged first. When others saw them taking the pledge, most just went along with the crowd."

Now 92 percent of couples with one child in the commune have taken the pledge, but some couples, especially those with one daughter refuse to go along in spite of repeated meetings and house calls to persuade them.

"What are you going to do about those that don't sign the pledge?" I ask He Xingzhou.

"All will sign the pledge this year."

"But how can you influence such an intimate family matter?"

He Xingzhous opened his "Family Planning Handbook" and read to me, "Family planning workers must have firm convictions. They must not be afraid to be cursed at, to be argued with or to be beaten."

"Has this happened?"

"It is not unknown."

The pressure of these problems weigh a lot on people's minds here, but not enough to stamp out a definite air of optimism. The village is a mess, with piles of dirt, bricks, stones, coal, corn and cotton stalks in the streets. But it is the messiness of a boom town, with lots of new construction.

The village elders, the ones who are still healthy, are the most chipper group I have seen anywhere, at any age. They are the ones who propelled the village through a revolution that achieved its main goals: providing everyone with enough to eat from year to year; putting a roof over everyone's head; providing warm clothing to fight off the winter cold. They all feel terribly wealthy, even though by most standards they are pitifully poor.

But younger people see the world differently. They are impatient to get moving and don't want anything to push them off the track. One official confided to me, "The people are tired of political campaigns. They don't want to hear a thing about them. Look at how poor they are. They want to be left alone so they can improve their lives."

After a hard day's work, people can relax in front of the production team television, or see a movie in the village theater several times a week, both recent improvements that address a long-standing complaint about village life: that it is boring.

People finally see the chance to put their village squarely into the modern age. The battle for survival has been won. The question in Dahe is not whether they will have enough grain to make it until the next harvest, but whether their incomes will go up fast enough to satisfy a quickly growing appetite for bicycles, watches, radios, and -- now -- televisions.

Dahe is indeed entering the modern age.