I went to Beijing expecting to find a city whose treasures had largely been destroyed in the Cultural Revolution. However, although much may have vanished, what remains is astounding. The Forbidden City is packed with more palace buildings than I have ever seen in one place, while the pavilions and bridges of the Summer Palace ring a lake twice the size of Hyde Park. And then there are the public parks established in former royal pleasure gardens, featuring lakes studded with islands and brightly painted pavilions.

I had been invited to the opening of Beijing’s newest gallery, installed, as modern art so often is these days, in a former factory building. It is part of a vast munitions complex built by East German engineers and known as 798. For security reasons military installations were not given names.

When production ceased, 798 was gradually colonised by young artists jubilant at finding lofty studio spaces with roof lights they had previously only dreamed of. Then the Belgian food tycoon Baron Guy Ullens, who sold his superb collection of Turner watercolours for record prices at Sotheby’s in July, came on the scene.

For several years Ullens has been buying avant-garde art in China. His new gallery UCCA (known by its initials, like MoMA in New York) consists of two parallel toplit halls. Ullens’s Parisian architect, Jean-Michel Wilmotte, said the conversion had cost just € 5 million, staggering value in Western terms but believable given the reasonable condition of the 1950s buildings and the low cost of labour.

This is a very smart makeover, ice white with black trim. The clever part lies in the use of space — it appears exactly the same by night as by day. This is achieved with the help of a central raised clerestory fitted with louvres through which sunlight glows. At night this is replaced by artificial light of identical hue. An overhead lighting bridge runs the length of the gallery. It looks as if the architect forgot to build a staircase up to it, but in fact the bridge is accessed via a cherrypicker.

Baron Ullens launched his new gallery with a series of parties almost as memorable as the great Bestigui ball held in the Palazzo Labia after the Second World War. With phenomenal éclat, he demonstrated that historic architecture can be used as the backdrop for events far more memorable than those staged in any hotel banqueting room.

A first dinner was held in another 798 munitions factory, the Glass XXX. This bears a splendid family likeness to the concrete arches of the mighty Stockwell Bus Garage, built in the 1950s to house 200 buses. Ten feet high (3m) Chinese lanterns stood at the sides of the room — the cabaret was performed by the Catalan theatre group La Fura del Baus: acrobats silhouetted inside the lanterns somersaulted through hoops..

Saturday’s banquet took place in the newly restored Tai Miao Hall of Ancestors outside the Forbidden City. Motionless silk-gowned Chinese maidens each carrying a purple paper lantern lined the walk across the sunken courtyard. Inside the hall clusters of hanging bronze bells were rung in haunting succession accompanied by thunderous bursts of drums. The dress code was glamorous: guests came in grey or black, in sombre contrast to the dazzling yellow silk gowns of the musicians and choir. Meanwhile, back at the Glass XXX, a vast building crane poised in the courtyard slowly and to the accompaniment of pulsating electronic beats hoisted a 50ft-long gantry into the sky. In an aerial ballet, five snow-suited acrobats appeared suspended on wires beneath followed by another five until eventually around 30 were hanging in the air jerking arms and legs in unison while the gantry began to circle at alarming speed.

The 798 quarter is now becoming a popular hang-out, filling up with cafés and bars. Signs of a similar revival are evident in the hutong districts where the quarters of courtyard houses open up off narrow lanes. Though slated for clearance, considerable numbers survive, especially around the Forbidden City. So great is Chinese interest in the traditional way of life that there are now hutong tours and handsome books on the hutongs. Arriving in Xicheng district to seek out Prince Gong’s Palace, an 18th and 19th-century garden of tortured rocks and tea pavilions, I found myself in a street of red-canopied rickshaws whose drivers proffered coloured maps showing one, two or three-hour tours.

Even more impressive on a Sunday afternoon was the endless succession of walking tours of Chinese people, each 50 or 100 strong. Losing my way I found myself in a 1920s house museum laid out around delightful verandahed courts which once belonged to the Chinese writer Guo Moruo. Prince Gong’s garden transpired to be the size of Eaton Square, and filled with as many local people as you might find at Victoria Station during rush hour.

Until the opening of UCCA, Baron Ullens’s collection was relatively unknown. A Brussels correspondent explained: “In Belgium our collectors are very secretive.” Perhaps the baron’s munificence and resulting public acclaim may tempt more of his fellow collectors into the limelight.

Ullens Centre for Contemporary Art (UCCA) 4, Jiuxianqiao Lu, 798, Chaoyang District, Beijing 100015, PO BOX 8503, P.R. China, tel: 010 643-86675. Open Tuesdays to Sundays from 10am to 18pm. Closed on Mondays; http://ucca.clicngo.com