The truth is, though, that the mystical life of the Shaolin Temple disappeared long ago. But the fantasy is very much for sale. Each year more than 1 million Chinese (and some Western) tourists visit the temple nestled in the mountains of Henan province in central China, about 800 kilometers south of Beijing. They gape in wonder at gravity-defying kung fu performances; they buy swords, figurines and Bruce Lee DVDs at the temple store; and they touch the stone where, nearly 1,500 years ago, the founder of Chan Buddhism and Shaolin kung fu left his shadow after nine years of intense meditation in a cave. Outside the temple gates, a profusion of martial-arts schools now competes for the dreams–and the cash–of more than 15,000 kung fu students, including a handful of dollar-dispensing foreigners. The temple itself has plunged into showbiz: the Beijing guests watching the young fighters in the courtyard are actually theatrical directors looking for performers to star in a glitzy new stage show that will tour the United States this fall. “We want to teach the world about Shaolin,” says Li Ximing, the show’s director. “So we need real Shaolin monks.”

Reality and fantasy, however, have been hard to distinguish throughout the legendary history of Shaolin. And it may be even harder today. The temple was founded in A.D. 495. But it really began, we are told, when the Indian Buddhist missionary Bodhidharma visited in the sixth century, founding Chan Buddhism (known as Zen in Japan) and developing exercises for sedentary monks that mimicked the movement of animals. Over the past 15 centuries, the monastery–envied for its autonomy, feared for its fighters–has been burned, attacked and nearly destroyed several times, most recently at the hands of Mao’s Red Guards during the Cultural Revolution. But the surviving Shaolin monks engineered a stunning turnaround by going capitalist. They have tapped into the growing local and international interest in Eastern religion and the martial arts. Today, Shaolin is a metaphor for the new China–a country hungry with dreams, scrambling for profits. But Buddhism and business don’t mix easily. Turf wars over which schools lay claims to the true Shaolin traditions–and the right to make money off them–have obscured the spiritual side of things. Shaolin kung fu is now sure to survive. But how much of its spirit will be lost?

Shaolin’s revival began in 1982 with the release in China of the Hong Kong-produced camp classic “Shaolin Temple.” The film, starring a 16-year-old martial-arts phenom (and future Hollywood star) named Jet Li, depicted the seventh-century legend of 13 Shaolin monks saving a Tang-dynasty prince from a conniving enemy. With its heroic fight scenes and comic low-budget props (such as paper snowflakes and spurting ketchup-like blood), the movie swept Asia and won a cult following in the West. Millions of tourists and thousands of aspiring kung fu stars descended on Shaolin, changing the very nature of the place. Twenty years ago the monastery was almost the only sign of civilization in the rugged Song Shan Valley. But today it is surrounded by a bustling village of food vendors, martial-arts suppliers and stores such as the Enlightened Monk Clothing Co.

But when the weekend tour buses depart, Shaolin reveals itself, above all, as a place of dreams. Shaolin’s single paved road is now lined by more than 40 kung fu schools, many of them set up by warrior monks or their disciples. (Unlike other Asian martial arts like karate or tae kwon do, the Shaolin “gong fu” taught in these schools is more for performance and competition than fighting. One of the oldest martial arts, Shaolin gong fu does encompass some forms of tai chi, qi gong and boxing.) Some of the 15,000 kids now training in Shaolin are runaways; village lampposts are sometimes plastered with handwritten posters from parents asking for help in finding their children. But more often the parents themselves drop off their children, sometimes as young as 3, hoping that the $20-a-month boot camps will give them discipline, strength and a bright future. At the Shaolin Monastery Wushu Institute at Ta Gou–whose 8,000 students make it the biggest kung fu school in the world–a group of 10-year-old boys sprawl out on a row of bunk beds after a grueling day of training. Most haven’t seen their parents in more than a year, but they are focused on their future. When asked what they want to become, they shout, almost in unison: “Jackie Chan!”

No wonder one of the fastest-growing schools is the Shaolin Temple Kung Fu and TV/Film School. It certainly doesn’t look like Hollywood or Hong Kong. On the school’s dirt training ground, 40 teenagers–many in bare feet, some in obvious pain–kick and punch a row of sandbags over and over. But the school’s 30-year-old director, Shi Yanzhang, has big plans, and an even bigger supporter: his master is the temple’s powerful abbot, Shi Yongxin. (The surname “Shi” is a Buddhist honorific that means “teacher” or “master.”) Yanzhang’s school, which teaches movie stunts as well as traditional forms of Shaolin kung fu, has placed 12 students in Hong Kong soap operas, including a series scheduled to come out this year called “The Bloody Monks of Shaolin.” Other students have appeared on MTV in Britain, and nine more were among the 26 chosen for the touring show at the courtyard tryout (the most of any school). Now Yanzhang is planning an ambitious expansion that could boost enrollment from 200 to 3,000 students. He freely admits that his guanxi (or connection) to the abbot is helping him. “Everything I’m doing today,” says Yanzhang, “is because of my master and his permission.”

But newfangled technology is becoming almost as important as old-fashioned connections. The Ta Gou school, which got government approval to take in foreign students in 1998, has established three separate Internet Web sites that generate 10 to 20 e-mails a week. That may not seem like much, but the school now has a steady flow of foreign students, including Americans, who pay at least 30 times more than the locals. (The average fee is $600 a month for room, board and training.) At a smaller school halfway up the mountain above Shaolin, Shi Hengjun is learning the power of the Internet, too. Last fall the warrior monk bought a computer for his ramshackle school and launched a Web site. It has brought in a half-dozen foreign students, who help finance his 300 other students. “If it weren’t for the Internet, he’d still be sitting alone in his mud hut on the mountain,” says Zhu Heming, a disciple who set up the Web site. These days, Hengjun is using his new income to install something else to attract foreign students: a Western-style flush toilet.

Luring foreigners to Shaolin is still not as important–or as lucrative–as sending Shaolin “missionaries” abroad. The Shaolin roadshows generate so much money that the government wants to horn in on the act, too. Over the past decade, Shaolin performers have crisscrossed the globe, raising funds for both the temple and the government. Last week a Shaolin troupe wowed spectators at Italy’s Spoleto arts festival with “two-finger” handstands and mock swordfighting. Similar groups appeared in Sydney, London and Las Vegas earlier this year. The shows, as critics point out, are more circus act than classic kung fu, as performers bend swords with their necks or break bricks on their abdomens. At least they don’t demonstrate the Iron Crotch, in which a highly trained specialist hangs a 50-pound weight from his testicles.

Such tours are often the source of conflict, too. Abbot Yongxin, who also happens to be a National People’s Congress deputy, has publicly denounced the recent shows in Las Vegas and Australia, claiming that they were carried out by fake Shaolin monks. “As long as Shaolin is a famous place, there will always be people wanting to sell it out,” says the 36-year-old abbot, who was elevated to the temple’s top post last year. But some “real” warrior monks–i.e., those trained inside the temple–say the abbot is more worried about profits than principles. The traveling tours, they say, incurred his wrath because they failed to remit money to the temple and the local government. The abbot, meanwhile, seems to promote his own. At the courtyard tryout, for example, he didn’t invite two of the best schools. As a result, nearly all of the coveted spots on the traveling tour went to students of his own disciples’ schools.

The Shaolin Temple is simply trying to protect an increasingly lucrative franchise. In 1992 it was hurt when three touring monks defected to the United States, including one who later appeared in TV commercials and set up a school in New York City. The temple is now negotiating with a Hong Kong-based advertising firm to promote everything from Buddhist health videos to kung fu consultants for Hollywood filmmakers. It has also set up official Shaolin kung fu schools in 10 locations, including London, Amsterdam and New York. One Shaolin performer, Shi Xinghao, remembers how, at the end of a 1998 U.S. tour, a local Chinese official gave him money to set up a school in Houston, Texas. The 27-year-old kung fu master now teaches 100 students in a Houston strip mall, sending regular reports to the temple and the local government. Back in Shaolin, Xinghao’s parents run a small restaurant whose walls are covered with posters of him on tour. They pull out a more recent photo from Houston and marvel at the transformation: their son is leaning against a white Toyota Corolla, his sunglasses perched stylishly on his shaved head.

The question hanging over Shaolin is no longer whether it can survive, but whether its spirit can survive its success. The money chase has turned the name into a product brand. Hong Kong sports promoter Carl Ching has no problem with that. He wants to build replicas of the Shaolin Temple in Hong Kong and Los Angeles, complete with daily training and performances. “It would be a bigger attraction than Disneyland,” Ching gushes. But Shi Yanlu, chief coach of the Shaolin Temple warrior monks, seems uneasy with trying to reconcile his kung fu school with his Buddhist vows (no sex, no money, no alcohol). Wearing black sweat pants, Nike shoes and a black Puma jacket, the 31-year-old master talks on the cell phone as he watches youngsters doing one-armed push-ups. “This is not a business,” he insists.

Still, for all the tackiness and turf wars, Shaolin crackles with a sense of promise. Before dawn one recent morning, 20-year-old disciple Shi Guocan was in the dark recesses of the monastery, chanting prayers before an enormous gilded Buddha. The young man was smiling: he had just been chosen to join the Shaolin performers in Beijing. Guocan had never been to the capital, and the bus was about to leave. After his prayers, he ran through the monastery, sliding down the stone banisters, bidding farewell to every sacred stone, grabbing his satchel for the long journey to a better life. For some, like Guocan, a new Shaolin fantasy is alive and kicking.