China embarks on a new cultural revolution with celebration of digital arts

If you want to see the end of the world, go to Shanghai. There, on the edge of a traffic island in Pudong, that gleaming megapolis which has, in 10 years, sprung out of nowhere, you can see the flames flicker around the base of the globe and rise up until it explodes. You can light the fire yourself and then stand back and watch the fireball fade to mushroom clouds of smoke. With a flick of the switch, you can end it all now.

This, after all, is the People's Republic of China – and "the people" are queuing up to exercise their power. They are young, and curious. One by one, they're waved in to the inner sanctum, where they taste – well, what? Power? Art? Technology? All three, actually. For this global fire is Global Fire, an interactive multi-media installation by the Chinese artist Du Zhenjun and part of Shanghai eArts, the biggest digital arts festival in the world.

At the 17th People's Party Congress in Beijing last month, President Hu Jintao declared that "the great rejuvenation of the Chinese nation will definitely be accompanied by the thriving of Chinese culture" and that "culture has become a more and more important source of national cohesion and creativity and a factor of growing significance in the competition in overall national strength". China, in other words, may be one of the world's fastest growing economies but without culture it is never going to be a serious global player. He didn't add, but might have, that China is hosting next year's Olym-pics. The world knows the Chinese can do infrastructure, but can they do content?

Luckily, officials at the Shanghai regional government have been thinking along the same lines. They know they can do glamour. This, after all, is the place where Noël Coward wrote Private Lives, where Charlie Chaplin danced the night away and where you can still sip cocktails while staring out at the most dramatic skyline in the world. They know they can do money. The skyscrapers which spring up almost daily are flowers fed and watered by wealth. And they know they can do technology. While, just a few miles down the road, peasants toil with scythes and buffalo, the Shanghainese juggle their mobiles and their Wii handsets as they dash home to check their email or watch their HD TV.

But can they do culture? Beyond, that is, the little studios and galleries that you find tucked away in old warehouses and factories. To prove they can, and on a grand scale, the Shanghai Cultural Development Foundation has joined forces with the Shanghai Pudong New Area Government, the Communist Youth League Committee, a raft of regional government bodies, and a range of international partners – the Pompidou Centre, Ars Electronica, MIT in the US and the British organisation Made in China – to create a packed programme of concerts, installations, performances and exhibitions.

In a hall in Pudong, cubes of green light are flashing and dancing like fish on what looks like a rippling river. This is the "Prelude" to the New Vision E-concert at the Shanghai Oriental Art Centre, which is also the opening ceremony of the festival. After a multi-media piece in which folk singers accompany an eerie electronic soundtrack, the stage empties and gives way to a single figure, decked out in the brilliant robes of traditional Chinese opera. As she sings her strange, squeaking song, the screen above the stage turns the beige of a watercolour. Through 3-D glasses we see black lines, dancing in the air in front of us, which are gradually gathered into the screen to make Chinese characters - and mountains. It's hard to imagine a more potent metaphor for the old and new China than this fusion of music, calligraphy, interactive video and opera.

There are, however, plenty more opportunities to gasp at the creative fusion of technology and art. At the Ars Electronica "Digital Art and Magic Moments" exhibition at Shanghai's spectacular new Science and Technology Museum in Pudong, there are stunning examples from around the world. In Phantasm, by Takahiro Matsuo, you can wave a glowing ball of light to create a dreamlike world where butterflies appear from nowhere as a piano plays. In Arabesque, by the British artist Peter William Holden, you can gaze at a mechanical flower, made from life-sized cast human body parts, which opens and closes to the rhythms of Strauss's waltz "The Blue Danube".

These are the international masters of the art, but there are plenty of examples by young Chinese artists, too. Just down the road, in the Library of Pudong New Area, there's Cross Dissolve, an exhibition of work by students from the New Media Department of the China Academy of Art. At the Tushanwan Art Museum, near Ikea, there's an exhibition of work by new media students from around the world. The quality of both is mixed, but it's all technically impressive and it's nearly all fun. This is art you don't just have to stare at. You can breathe on it, touch it, tread on it. And you can make it change. Democratic art, you could call it.

"To us," says Zhang Peili, the dean of the new media department of China Academy of Art, at a simultaneously translated Wisdom Forum at the Museum of Science and Technology, "new media is not just a technology, but a cultural attitude.

"New media can bridge the relationship between the mass public and the elite class, and between mass and elite art. New media," he adds, "also represent a political state. I went on a tour to North Korea and there was only one TV channel."

Political freedom in China, of course, is the elephant in the room. It isn't mentioned in the Wisdom Forum. It isn't mentioned at the Knowledge Forum, a seminar on Creative Entrepreneurship hosted by the MIT Media Lab, and taking place in Shanghai's new Knowledge and Innovation Community, a vast new live-work development which aims to be a cross between Silicon Valley and Paris's Left Bank.

It isn't mentioned by any of the sassy young entrepreneurs, from China and the US. And it isn't mentioned by any of the entrepreneurs attending a sumptuous dinner hosted by the gallery owner, Pearl Lam. These are people who casually mention their houses in Paris, Hong Kong and Italy, but who moan about the record-breaking prices of Chinese art. These are, in fact, people who don't have to worry about politics because they have the real power.

"There is a one-party state in China," says Philip Dodd, the chairman of Made in China, a partner in the festival, "and it would be crazy to pretend otherwise. The big issue is what will happen in the future. They are where they are. For me, festivals like this are a way of developing a kind of rich, plural, diverse set of activities that the state is involved in, but doesn't entirely shape.

"There are more mobile phones in China than in Germany, Japan and America put together.

"There's now an extraordinarily large and various urban population in China who also have nothing to do. These mobile phones are their versions of cinema screens. So whoever fills the content of these in China seems to me to win the future of China."

If Shanghai eArts is anything to go by, a new cultural revolution has just been launched. The question is whether culture automatically springs out of money, whether public subsidy can create good art, how and how far it can flourish without a degree of political engagement. It is a start, but this might prove to be a very long march indeed.

Shanghai eArts continues until 19 November. Visit: www.shearts.org