The Bi-City Biennale of Urbanism\Architecture began in 2005, the brainchild of the Shenzhen municipal government, and the fifth edition has just opened in Shekou for the first time.

The event has been held simultaneously in Hong Kong since 2007 - hence the "Bi-City" label - to highlight the growing co-dependence and problems of integration between the two places. The curatorial teams and other organisational aspects are entirely separate. This year, the Shenzhen side wins hands down for sheer spectacle as well as scale and depth of content.

The two-storey machinery hall in the former glass factory retains rows of large, concrete stubs that must have served some prosaic original function. Viewed from a circumferential walkway between the factory floor and the corrugated metal roof, the generous space recalls both the Tate Modern's Turbine Hall in London and the covered pits of Xian's terracotta warriors.

Major names in architecture and design display their projects in a series of rooms along the walkway.

Rem Koolhaas' OMA is conducting workshops on an ancient Chinese text about roof construction. The Victoria and Albert Museum's display is an assembly of everyday objects that encapsulate contemporary urban life in Shenzhen. Others bring an international perspective on urbanisation, site-specific interactive projects, as well as reflections on sustainability.

The exhibition continues at the top of a large tower with views of the sprawling Shekou Container Terminal and a large vegetable farm, set up as part of the sustainability message. A spiral slope takes visitors back to ground level and into the silos, where artists perform light shows in the murky gloom of the cylindrical caves.

Yoyo Yeung, a fourth-year design student at the Guangzhou Academy of Fine Arts, is delighted by the experience. "My friends and I decided to get on the train and spend a day here at the biennale. It's great. For young people interested in design, there is so much more to see and do around here these days. With any luck, it means we'll be able to find jobs in the creative sector when we graduate," she says.

The person behind the factory's transformation is Ole Bouman, the former director of the Netherlands Architecture Institute, who is now the creative director of the biennale.

This "sublime" space, he says, is reminiscent of the monolithic designs of the great American architect Louis Kahn: "It is sculptural, and one can play with shadow and light a lot. Here, you can have a direct dialogue with architecture."

China Merchants Group, the state-owned conglomerate that owns the Shekou Industrial Zone, supplied about US$9 million for the factory's conversion, and plans to turn it into a public facility for the creative media industry when the biennale ends in three months' time.

The other venue is the former Shekou Border Warehouse, located next to the ferry pier with regular boat services to Hong Kong. The simple structure has been converted into a treasure trove of dynamic displays, both whimsical and scholarly, that focus on this year's theme of urban borders.

National pavilions present case studies on urban redevelopment, and architects from all over China bring their visions of the future city under the guidance of curators Li Xiangning and Jeffrey Johnson.

Most pertinent to Hong Kong visitors are two different proposals for the restricted area between Hong Kong and Shenzhen, an area covering thousands of hectares that is gradually being developed by both governments.

Chen Zetao, of Shenzhen's Fang Cheng architecture firm, suggests a city in between the two cities offering shared functions such as retail and health care. Dutch-Shenzhen firm Doffice, which has Hong Kong architect Jasmine Tsoi on its team, proposes a much greener vision which puts the area's natural value ahead of commercial development.

Bouman thinks that the biennale reveals a sensitive approach to city planning in Shenzhen. There is a historical consciousness among Shenzhen officials, he says, which can be seen from the plan to preserve the glass factory, a symbol of Shekou's early industrialisation.

"A lot of people in the civil service want to contribute to the larger story. In the West, the symbiosis of making space and envisioning the future has evaporated," he says.

Senior Shenzhen officials have expressed an encouraging degree of interest in the academic aspect of the biennale, where workshops and symposiums will focus on the theme of urban regeneration.

"Look outside the old warehouse and you see Shekou, an important industrial site that is now hollowed out. The theme of city boundary is so applicable here. The biennale can help urban planners come up with ways to keep icons of historic development and endow them with new functions," says Xu Chongguang, the Shenzhen municipal government's deputy secretary-general.

"We need to discuss how we move towards higher quality growth after a period of high-speed economic development, and the biennale is just the right platform for it," says Harvard-educated Huang Weiwen, one of the progressive officials at the Shenzhen Municipal Planning Bureau.

Shenzhen has a long way to go before it becomes a mature, world-class city. Last Wednesday's fatal fire at a fruit market exposed the inadequacies of vital urban amenities such as working fire hydrants. Millions of migrant workers live and work in appalling conditions. Those who refuse to toe the party line, such as the city's courageous labour activists, are still being sent to jail. But for the middle class, Shenzhen is a culturally sophisticated and liveable city.

The government's opening up of its side of the restricted area in Shenzhen Bay has created new waterfront communities and promenades. Gleaming architectural trophies such as the Rem Koolhaas-designed Shenzhen Stock Exchange and the new airport terminal by Studio Fuksas put Hong Kong's unimaginative skyline to shame.

But for all the talk of high-quality growth, sceptics worry that any sensitive message will soon be forgotten, as Shenzhen ramps up the commercial redevelopment of its western fringe, including the Shekou Industrial Zone.

China Merchant Group plans to turn the area, which has little industry left, into a cruise terminal that will compete with the one in Kwun Tong and create a new business district called Taizigang by 2021.

Participants in the biennale privately wonder if the event is largely a publicity drive to promote the development, and ask whether Shenzhen needs to build a business district a mere 10-minute drive from the future Qianhai Special Economic Zone.

Shenzhen's executive vice-mayor Lu Ruifeng thinks it does. "Taizigang will be ready much sooner than Qianhai and, eventually, it will complement Qianhai. Shenzhen is a city of immigrants. If we build it, people will come," he says.

If Shenzhen's city planners manage to turn the biennale's cerebral conception of urbanism into reality, then they probably will. As Huang says, the only limit to the city's future is the people's imagination.