If you want to teach budding engineers about concrete, have them build a canoe. That way, they can isolate the extreme properties of concrete, which is where the learning takes place.

Same with business in China. It's hardly a place that American businessowners hold up as an example of how to live in a free society. But watching enterprise thrive under extreme conditions is a great way to learn about the essentials of free markets.

And construction of new housing is one of the most instructive areas in China today.

If you think parts of California have seen a housing boom over the past five years, you should see Beijing. During a recent trip, I counted 40 construction cranes during a short ride from the airport to my hotel. Later, I learned that more than 1,000 cranes rise above the city, many of them working around the clock. Other Chinese cities are the same. Any California city would be hard pressed to claim a dozen.

The scale of construction in China is unprecedented. New housing is the top priority. Not just in words, but in actions. In China, they know that talking about housing is not the same as building housing. Sticks are in the air. As China embraces free enterprise, it is seeking to create a middle class. They know without housing and homeownership, they cannot succeed.

The Chinese have come up with a novel way of meeting their housing goals: encouraging home builders. And Californians are helping. Dahlin Group, a Solana Beach architectural company, opened a Beijing office four years ago. They are designing housing projects and winning competitions across the country. Their most popular homes are exactly the same as those you would see in any California community. Classic California designs, with family rooms, large master bedroom suites, exotic bathrooms, and high ceilings.

The only thing missing is the three- or four-car garage. The Chinese make do with a single garage and a bicycle. Miss Lie Fie, an associate of Dahlin Group's Chip Pierson, showed me three projects, named Napa Valley, Yosemite, and Forest Hills. Ryan Young Interiors of San Diego decorated the models. Beijing home builder, Kum Dai, told me he is selling homes for between $250,000 and $1 million, and many of his buyers pay cash.

Learn more about markets featured in this article: Los Angeles, CA.