There is no escaping China: Chinese art, Chinese exports, the Chinese economy, Chinese dollar reserves, Chinese growth. Next year’s Olympics in Beijing are focusing the world’s eager eyes on the Chinese capital. While London struggles to persuade a sceptical public about the need to spend more than £9bn, Beijing is spending more than double that. That construction costs there are around seven per cent of London’s gives you some idea of what is happening.

The Olympic site, in the north of the city, remains a dusty, lunar landscape, kept in a churning, swirling, animate state by an endless stream of bulldozers and trucks. It is hard not to keep snatching photos of the deliciously jarring juxtapositions of workers squatting to eat bowls of noodles in the shadows of the unimaginably complex structure of the Olympic buildings or of rickety handcarts bodged together from bicycle wheels and orange crates filled with high-tech components. A stroll around the site, or around the city’s Financial or Soho districts, impresses upon you that the theatrical statistics about the Chinese construction boom causing a worldwide shortage of steel and tower cranes, or about it consuming half the world’s concrete, are probably understatements.

The world’s great architects are queuing to poke the Beijing skyline. Here, among the city’s 8,000 building sites, they can realise their fantasies, impossible megastructures and awesome towers. But this is not the architectural adventure playground of Dubai and its skyscraper cities built on the tabula rasa of the desert: this is a thriving city, with a hugely complex history and structure, undergoing an adrenaline shot of money and change. Here the architects are feted and celebrated, their mad monoliths realised by cheap labour, the unattainable dreams of the west manufactured cheap in China.

The results are good, bad and ugly. The gateway will be Foster & Partners’ Beijing airport, now nearly finished but formerly the biggest construction site in the world, employing an astonishing 50,000 workers. The most visible urban presence is the CCTV building, a sci-fi monster, twin towers leaning in to kiss, unable to resist each other’s brilliance. Then there is Paul Andreu’s flying-saucer National Theatre facing Mao’s portrait across the endless Tiananmen Square, a space as tainted by memory as it is shrouded in smog. Finally there is the Dashanzi art district, a grid of industrial structures overtaken by studios and galleries.

Coolly extruded, identikit modernist towers rise beside bland commercial slabs, green-tiled dragon roofs are applied like false noses to dumb façades only a couple of years old. The city is an architectural cacophony leavened by occasional snippets of harmony. Most striking is the contrast between the old city and the crushing march of the new. Reams have been written bemoaning the pitiless destruction of the hutongs, the dense networks of courtyard houses that made up the fabric of the old city. At their best, these are picturesque, tranquil lanes leading to intimate courts. But more often they are slums. Single-family dwellings nationalised by Mao in the 1940s and given over to peasant families arriving to work in the city’s new factories, many now contain seven or eight families existing without plumbing, gas or heating.

It is true that these dwellings are being lost, along with the city’s character, but what is that character? Some run-down hutongs are being rebuilt. The replacement houses are solid and good, built from a Beijing brick as grey as the city’s smog, with delicately tiled roofs sweeping gently upwards at the corners, but the resulting bland network of streets has none of the maze-like intrigue of the old quarters.

From the west, it can seem painful to have to watch a culture making the mistakes we have spent a generation trying to rectify: a massive reliance on the car, a zoned city densely packed with business and retail at its centre and residences beyond the endless ring roads, the squashing of historically loaded and complex networks of lanes and alleys beneath corporate behemoths of glass and steel.

This is not the politicised, idealistic utopia of the European modernists of the inter-war avant-garde. The art that emerged in the 1980s, a kind of agit-prop, was christened “cynical realism”, and there could hardly be a better term for Beijing’s architecture. In among the dross is a sharp official eye for the real deal. The co-opting of the world’s most radical and brilliant architects belies an approach of real sophistication, the ability of the state to use building as propaganda. Dutch practice OMA (the Office for Metropolitan Architecture) leapt at the chance to design the headquarters of the omnipresent Chinese state TV, CCTV. A new twist on the idea of the twin towers and one of the biggest buildings ever constructed (only the Pentagon has a bigger office), CCTV’s 70-storey masses lean on each other like drunken pals. The towers have just been joined at the top and the effect is like the covers of those 1970s pulp sci-fi novels featuring unimaginably complex space stations under construction, a metaphor for the colonisation of space.

Here it is the airwaves that are being conquered. Conjoined at top and bottom, the building appears like a new type of structure pregnant with infinite metaphor, a particle accelerator, a blank TV screen, triumphal arch, a deconstructed doughnut. As well as a staggering and innovative building, Beijing also gets OMA’s founder, Rem Koolhaas, the pre-eminent polemicist of contemporary architecture, polemicising for their side. Human rights abuses, dictatorship, executions, Tibet: none of this is discussed. As Koolhaas has said: “A position of resistance seems somehow ornamental.”

The same sophistication has been shown with the selection of the less theoretical but equally radical Swiss architects Herzog & de Meuron for the 100,000-seater Olympic Stadium. The outrageously complex structure is a shell built up from a spaghetti of steel members, among which no two are at the same angle. The stadium arose from a collaboration with Chinese artist Ai Weiwei, an important figure in Chinese culture. The structural web is said to have been partly inspired by the crackle-glaze of ancient ceramics. The artist recently disassociated himself from the project, apparently because he had become concerned that the stadium was being used as propaganda by the state. What had he thought? That they’d keep it quiet?

Despite his concerns, it is an astonishing object, sparkling above its dusty site like a tangle of beautiful jewellery, the gem of the arena itself visible in a shock of red through the structure. It is the most elegant and architecturally ambitious Olympic building since Frei Otto’s tensile stadium in Munich in 1972. Whereas most host cities, including London, settle for the dull competence of stadium specialists, Beijing has commissioned the world’s most enigmatic and unpredictable architects.

Beyond the Olympic stadium is the architecture-parlante of the aquatic centre, the work of Australian architects PTW. It looks like an overflow from a washing machine, a mass of squared-off bubbles, as brilliant and self-explanatory as it is absurd.

For an auspicious gateway, Beijing came to London. Foster & Partners had already designed Hong Kong’s huge Chek Lap Kok airport, a building commissioned in a colony and opened in a Peoples’ Republic. From your first embrace by the new extravagantly curving canopy, you realise you are in a country with astonishing architectural ambition: 3.5km from one corner to the other (as big as all five terminals at Heathrow put together, plus a bit), this is a pure piece of Foster, clean lines, lots of natural light, an endlessly undulating roof and endless, uncluttered space. It is a building of cool clarity and huge skill.

And then there is art. Like London, Berlin and New York, Beijing has its art ghettoes. There is a kind of clichéd poetry in their establishment in the old arms factories of the Dashanzi district, like that hippy girl placing a rose stem in the barrel of a soldier’s gun. The artists colonised the factory buildings as they were vacated in the early 1980s. But this was a strange quarter. Rather than the accustomed gritty dilapidation of a harsh industrial grid, the streets here are lined with trees, the factories are beautiful concrete constructions, designed by Bauhaus-trained engineers and architects brought from East Germany in the 1950s. And the streets bustle with eager western dealers and wealthy artists. At first threatened with eviction by a government wanting to clear the site for new construction, the economic, cultural and political impact of China’s art boom made the authorities reconsider. In another shrewd move, they instead upped the rents and encouraged the growth of Dashanzi’s art culture. It makes economic and propaganda sense. Surely a government that allows this kind of thing can’t be all bad?

The gallerists all mention censorship when prodded but wave it away as a minor curiosity. An incognito inspector arrives and occasionally orders a show to be closed but there are no further repercussions, no jailings, no confiscations. The galleries themselves are as artfully exquisite as anything in Chelsea or Shoreditch, employing a meticulous post-industrial fakery of stage-set concrete and rust. The ennui of Disney industrial quickly sets in.

A coffee here costs more than it does at a New York Starbucks – the art costs even more. As soon as an artist sells a few works, he employs a workshop of art students to churn out more. This is manufactured art, mass-produced to fill the galleries of a voracious west, themselves looking to foist the next big thing on to their easily-led neophiliac clients. But, unlike in the old factories, there is no quality control. There are glimmers of brilliance but most of what you see is tourist tat. The opening last year of the Ullens Centre for Contemporary Art, founded by a Belgian philanthropist and designed by a French architect, in the biggest of the factory buildings (No 798: all arms factories began with an auspicious “7”) has institutionalised the art quarter but perhaps also signals its death throes.

Many artists are, appropriately, moving back in towards the city’s financial district, a morass of dusty building sites and shiny new offices, overshadowed by the wonky mass of the CCTV towers. The not-for-profit Today Art Museum, designed by Wang Hui and housed in the hulking brick carcase of a former brewery, is fronted with those (by now familiar) zig-zagging forms, a deconstructed veranda, but behind is a hugely impressive space, an endless blind tower of harsh, white galleries.

Already the plaza in front of it has sprouted an elegant brick pavilion and was, when I was there, filled with a sly simulacrum of an interior-designed show apartment. The kind of thing, in fact, that will probably be found in US architect Steven Holl’s grouping of towers beside the ring road (née city wall) near Dongzhimen. Christened, with poetic charm, the Beijing Looped Hybrid, this is a utopian modernist city familiar from 1920s visionaries. Linked blocks ring around a compound to make a frighteningly rigid gated city. This is modernism as envisioned by yuppies, the 1920s channelled through the 1980s.

Beijing is developing as a city of isolated incidents: the Olympics, the towers, the historical stuff conveniently walled in the Forbidden City. It resembles a theme park and architects are happy to stud the cityscape with their newer, bigger, better rides. While western cities are chewing over the failures of the first wave of modernism and wondering quite why those historic town centres are still so nice, Beijing is smashing its historic fabric and building 300 skyscrapers.

China has co-opted architectural and artistic radicalism in a manner that might be described as visionary, or perhaps as shrewd, or perhaps as coolly cynical. The city’s face is pock-marked by the acne of construction, its skyline prickly with the silhouettes of tower cranes and fast rising concrete cores. It is being turned into a laboratory of architectural ideas. In Beijing, the world’s greatest architects have virtually given up on the idea of the city. This is modernism minus utopia, and with no context – physical, topographical, political, theoretical or urban. The simple, single image is everything. Any of these buildings could have been built anywhere else. Beijing is becoming a realisation of the most superficial aspects of a contemporary design culture obsessed with the gesture and the icon, with the cleverness and complexity of its own structure. This is architecture as stage set for the Olympics, for a regime determined to demonstrate its modernity and its emerging economic and cultural power. Radical architecture has let itself be used for spectacle and propaganda. Cities are made of buildings but great buildings are not enough to make cities.

Edwin Heathcote is the FT’s architecture critic