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The People of Beijing breathed a collective sigh of relief yesterday as it became clear that the Communist Party could throw a party. The opening ceremony in the "Bird's Nest" stadium turned out to be every bit as spectacular as the people had been promised.

The capital's residents know that the event took place against a background of discontent about China's human rights record and its stance on controversial issues such as Tibet, separatists and selling guns to Darfur. But these are largely non-issues for most Chinese and for a few hours, controversy took a back seat to the event itself.

"This inspired people," said Yang Xiaobo, 23, a pharmaceutical engineering graduate from Beijing University. "Chinese culture looked very beautiful."

Away from the big screens, the streets of the capital were deserted except for police cars driving up and down during the ceremony as everyone watched the event on television.

Inside the stadium the hordes of VIPs, including 80 world leaders, saw the spectacle live. Nicolas Sarkozy was spotted introducing his young son to Vladimir Putin. And the Russian Prime Minister later shared an informal chat with George Bush. Mr Bush began his day high-fiving with the US team but later visibly flagged. With Laura Bush upright and attentive, her husband was slumped in his chair. Aides later confirmed that the first US president to attend a foreign Olympics was back at his hotel half an hour before the torch was lit.

Getting around is not so easy for ordinary people. No one is anyone without a badge around their neck in Beijing these days and you need a passport to get anywhere. Some Beijingers, including dissidents, would have been watching the show from enforced house arrest. But most, in truth, were deliriously happy.

"This is fabulous. China will be stronger after the Games. It's a big opportunity for foreigners to invest in China and to see that China is here," said 24-year-old Zhao Xiaoyu, who works for an international company. She was speaking at a big-screen viewing event near the newly constructed central business district, which was emblazoned with Coca-Cola advertising in a way that Chairman Mao might have found hard to swallow.

"There's been negative news about China, but there are always misunderstandings between countries," said Ms Zhao. "People won't forget these differences, but they will possibly avoid them. If the Western world wants to know about China, they should let it be itself."

Foreign journalists have come in for criticism for being too negative. They were defended by Mr Yang, who said: "I don't think foreign journalists have been too critical. It's an engine to push China towards progress and develop more. China will be a more open country and foreigners will know different things about it. Our country is becoming more and more strong, but also more friendly."

There were plenty of oohs and aahs for the fireworks, which always go down well in Beijing, given they were banned until a couple of years ago. The orgy of pyrotechnics could not obliterate the customary wry humour, though.

As a legion of elegantly coiffured dancers emerged, an elderly woman in one of the old hutong laneways network joked: "I wondered where the hairdressers had gone recently."

She was referring to the clampdown on prostitution which has seen the closure of many hairdressing salons – known as "whoredressers" – which act as a cover for brothels throughout the city.

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