“In Beijing they shit ice cream and piss lemonade,” says Robert Bernell, one of the founders of the Dashanzi Art District, also known as the 798 Art Zone, and of Timezone 8, a bookstore and publishing company. Bernell, along with longtime dissident artist Huang Rui, has been one of the many consistent forces behind the development of the new art scene, launched in 2002. In other words, crap is selling at extraordinary prices and everything you touch can turn to gold because this town is hemorrhaging money. Nothing can staunch the flow of a national ten percent growth rate. Chinese artists drive brand-new BMWs, Hummers, Jeeps and Jaguars and have studios the size of airplane hangers. Rampant imitation, censorship of politically sensitive material, sexism and art speculation abound. There is also brilliant work, new institutions and a dampening down of creative repression as artists exhibit works that would not be possible just a few years ago, such as the controversial “Eating People,” in which performance artist Zhu Yu deep-fried a stillborn human fetus and ate it. How did this happen in a country that for all intents and purposes had no art market eight years ago?

After the Communist revolution, a cadre of art students dutifully tromped off to the Soviet Union to absorb its style of Social Realism, the Chinese version best remembered for kitschy posters of Madame Mao and sexy pigtailed Red Guard ballerinas. The post-Gang of Four policies of Deng Xiaoping opened China to the outside world, although in 1979, creative types mounted an exhibition called “Stars” that was instantly suppressed. In the 1980’s, liberal Prime Minister Zhao Ziyang launched “Beijing Spring,” and the “New Wave” art movement was born culminating in the February 5, 1989 gunshot heard ‘round the world at the China/Avant-Garde show at the National Museum. Xiao Lu fired two bullets into her telephone booth installation “Dialogue,” shattering mirrors, glass and so much more, shocking the nation. The exhibit was shut down two hours later by the authorities and she and her partner were tossed in jail. The Tiananmen Square massacre and the destruction of the “Goddess of Democracy” statue followed shortly thereafter, forcing artists to flee the country. The dominant style became Political Pop and Cynical Realism. In 1991, Red Gate, the first gallery of contemporary art opened, run by Australian Brian Wallace, and by the end of the 90’s new art forms emerged. At the turn of the millennium, the Shanghai Museum of Art started the Shanghai Biennial, its first international exhibition, and exiled artists began to trickle back. In 2002, the 798 Dashanzi Art Zone was born.

This year, for the first time in the 110-year-history of the Venice Biennale, China will have a permanent pavilion. Hou Hanru, the curator, has challenged the institutionalized sexism that has lead to the near-exclusion of women from China’s contemporary avant-garde by choosing four female artists, Shen Yuan, Yin Xiuzhen, Kan Xuan and Cao Fei to represent their country in an exhibition called “Everyday Miracles.”

Symbolic of this new art scene’s teething pains was this year’s split over the Dashanzi International Art Festival. Seven Stars, the managing group of the 798 arts complex, and Huang Rui, who became the festival’s founder after enduring years of political exile in Japan as one of the original members of the Stars artist group, parted ways when Rui was unceremoniously dismissed. For his “final performance,” Rui asked friends to visit and talk about how to create a successful new festival. The ruminations became a wake with people expressing outrage and grief that Rui, who had given so much to found and nurture the district, had been so thoughtlessly removed. A new curator, Zhu Qi was brought in and had less than two months to put the Dashanzi festival together. Rui responded with a counter festival that will take place throughout Beijing this coming September.

The current festival includes Ye Fu and Hai Rongtiantian, a couple living in a gallery window for a month vowing not to touch one another, Zhu Ming’s photographs of himself floating on a river inside a huge plastic bubble, and Liu Baomin’s paintings of a shattered face. the:artist:network, based on Canal Street in New York, brought 20 international artists to create SURGE, a site-specific installation.

But what’s really electrifying is a small, museum quality retrospective Art, Condoms, Eggs and Gunshots at Zero Field Art Center, presented by the Wen Pulin Archive of Chinese Avant Garde Art. The show details how the avant-garde is finally coming to terms with its legacy and place in history. A recreation of Dialogue, Xiao Lu’s infamous telephone booths with bullet holes, red tape, and shattered mirrors, is prominently displayed.

There are photos of Lu, standing in front of the booths, her arm outstretched, gripping that notorious gun. At the 2004 Dashanzi Festival, she displayed 15 Shots, a photo/performance marking the event’s fifteenth anniversary. It is a single image of her pointing a gun repeated fifteen times, fading in contrast from crisp black to foggy white , indicating how she had been forgotten over the years and the shooting incorrectly attributed by reigning critics to her male partner.

Another work from the infamous 1989 China/Avant-Garde exhibition is a logo designed by artists of the universal sign “No U Turn,” signaling the impossibility of going back to Maoist years. There are films of them unfurling these signs outside the National Museum. The avant-garde is able to look at itself for the first time with a cool eye; when you know where you come from, you can understand where you are going. This is the clearest sign of health for contemporary Chinese art and society, not the frenzied international hoopla or record-breaking auction prices.