LONDON (AP) -- ''Made in China'' appears on everything from iPods to refrigerators but if the country's stunning economic growth is to continue, the next step is for shoes, laptops and mobile phones to start bearing the label ''Designed in China.''

 

An exhibition at London's Victoria and Albert Museum appraises for the first time how close China is to making the jump from running the world's factory floor to taking control of the drawing boards.

 

Timed to coincide with the run-up to the Beijing Olympics, ''China Design Now'' reveals that although the country may not yet be ready to dominate the catwalks or consumer electronics shows, an exciting entrepreneurial design culture is stirring.

 

''I feel that we're on the cusp of that shift actually and what I hope is that a lot of people's expectations will be confounded,'' said Lauren Parker, the exhibition's co-curator.

 

The exhibit takes visitors on a journey starting in China's southern frontier in Shenzhen, which transformed from a group of fishing villages into the world's largest manufacturing center after being made China's first free trade zone 30 years ago.

 

The exhibit traces the birth of China's graphic design culture to the arrival of young designers who gave up secure state jobs to move to Shenzhen for access to the latest technology and ideas from neighboring Hong Kong, which was then in British hands.

 

Unlike their western counterparts, the Chinese designers had no advertising industry to provide training and jobs.

 

Examples show artists playing off of traditional calligraphy, altering Chinese characters to reveal deeper meanings, before moving on to modern urban designs for toys, sneakers and skateboards.

 

The exhibit examines fashion and the rise of the middle class in the 1990s and its pursuit of the ''Four Great Things'': a car, a house, a computer and a mobile phone. Clothes on display draw inspiration from the 1920-30s when glamorous Shanghai was the ''Paris of the Orient.''

 

Consumer items on display include a mobile phone designed by Lenovo, which bought IBM Corp.'s personal computer unit in 2004, in the black and red colors of lacquerware in a cradle inspired by a Chinese hot-pot plate.

 

China's regard for the importance of design is most obvious in Beijing, where billions of dollars are being spent on daring architecture that embodies China's economic transformation and its global ambitions.

 

A computer animated film allows visitors to feel like they are soaring over the city's shimmering new landmarks, from the dragonlike airport extension by Britain's Foster + Partners to the ''bird's nest'' Olympic stadium by Switzerland's Herzog and de Meuron to the China Central Television's Z-shaped headquarters by Rotterdam, Netherlands, architects Rem Koolhaas and Ole Scheeren.

 

''Ambitious and significant buildings are going up in the city in an amount and scale that no other city has ever produced simultaneously,'' Scheeren said, standing in front of a model of his leaning towers.

 

Chinese architects are learning through working with foreign celebrity architects as well as striking out on their own trying to develop continually evolving new styles, Scheeren said.

 

''There's an enormous emergence of ability and ambition,'' he said. ''But I think it will also take the country a number of years to really figure out where they want to go.''

 

In 2006, the Chinese government said the future of the economy depended on becoming innovation-driven. In the three preceding years, China invested 1.5 percent of its gross domestic product into research and development, representing the largest increase of any country, according to a British government study.

 

An estimated 500 schools offering design courses have sprung up across China, but there is a shortage of qualified teachers, the curators said.

 

Chinese manufacturers have yet to give designers the freedom to move -- from a cosmetic role to rethinking products the way products work.

 

''At the moment, in our view, creativity is there, and is expressed very vividly, but in terms of its connection to business and to manufacturing it's quite weak,'' said Zhang Hongxing, the exhibit's other co-curator. ''But right now is a really exciting moment and we have to document it.''

 

The exhibit runs until July 13.