The rumours swirling about this Shanghai-based artist are just one sign of his standing in the art world; the voracious appetite of collectors to buy his work is another. But Zhang Huan is going to be even better known within two or three weeks, by which time three shows will have opened-a much lauded exhibition has just begun in New York at the prestigious Asia Society, the Huanch of Venison gallery in Berlin opens an exhibition of his next week, and a new show is opening early next month in London.

If the world needs an iconic artist from the new global power-house, then it may be Zhang Huan’s fate to be that artist. In a short time he has come a long way. As recently as 1994, Zhang was s i t ting on a Beijing public toilet, a performance artist covered in fish oil and honey, and attracting the attention of flies. Now he is the focus of much wider attention.

I’ve met Zhang several times, mostly in his studio, as large as an aircraft hangar, on the edge of Shanghai, far from the glamorous splendour of the Bund. He’s a gaunt man with a compelling sculptural face who dresses with an unstudied casualness that must come, at least in part, from the poverty in which he lived for many years. He smokes as we talk and slowly relaxes, mentioning’ in passing that he was very poor during the time he was doing performances in the early 90s in the now legendary artists’ quarter of the East Village of Beijing. "Then I never imagined there would be such interest in my work." he says. For once, this doesn’t feel like fake modesty.

For much of his life, he has been a performance artist or one who used his own face and body in photographic works. But I’ve come to the studio to see his new painting s and sculptures, which are staged on the walls and floor of the enormous studio. It’s a testament to their power that they feel as if they fill the cavernous space. Both the paintings and sculptures are made from incense ash. Into the ash of the paintings are set a series of tiny portrait photographs; the sculptures are a series of large, compelling grey heads.

It’s hard for someone from the west to grasp the resonance of incense ash as in Chinese culture and the audacity of using it as material. But Zhang tells me he was so excited that couldn’t sleep for days after he had the ash delivered : "When the incense ash was first brought to the studio, I went down on my knees to pray. As far as I know, no other Chinese or even international artist has ever used incense ash before."

Zhang Huan was born in 1965 in one of China’s poorer provinces, Henan. When he was living in the countryside, he remembers his grandmother dying. "After that every Chinese New Year, we would bring the ashes back to the house, put it on the table with food and fruit, and pray for her. So from my childhood I was familiar with ash but it was only more recently, after living in Beijing and then New York, and coming to live in Shanghai that the possibilities took hold of me." He went to a Buddhist temple where the incense smoke was so dense that that he could hardly see the people. "The hundreds and thousands of burning incense sticks planted in the incense pot were the hopes and wishes of all those people." As a material, it gives his works a powerful elegiac quality.

China is propelling itself pell-mell into the future, planning to move more than 50m people into the cities over the next ten years. In a country practising a calculated amnesia, the role of the artist comes to be that of a memory man. "Nowadays, great changes are taking place in China, people have destroyed more and more but the new things haven’t been established yet. Once in a temple, I saw a middle aged woman moaning to a stone Buddha. First, I just thought she was insane, hysterical. But then I began to ponder over why people are so attracted to traditional things. My wife converted to Buddhism four years ago and I became one two years ago." Thus Zhan g is a reclamation artist of sorts: another set of new works is a series of beautiful "memory doors", made from reclaimed doors that he remembers from his childhood. In the country where all eyes are on the future, the artist, contrary as ever, looks back.

But for a time, and especially in the mid and later 19 90s, Zhang felt there was no home for him in Beijing. He simply couldn’t make enough money to live. So in 1998 he decided to go to New York. Ai weiwei, another Chinese artist who had lived in New York, advised him not to go. "’You are already in your 30s and you don’t speak much English,’ he told me." Other friends told him he was crazy-that he’d be sitting in a classroom, surrounded by the young, "looking like a donkey". But he was determined to go. "I had already prepared myself for the worst case-that I’d have to carry the dead bod ies in a hospital to make enough money."

In the end he began to make his way in the New York art world-although that isn’t what we talk about. Instead he tells me about going out to buy some food for his pregnant wife. On Eighth Avenue, two passers-by gave him some bread, thinking that he was homeless. "I wanted to cry" he said.

In 2006 Zhang Huan, his wife and children moved back to China, but to Shanghai rather than Beijing. It’s as if he seeks out the shock of the new, if only to test the strength of his old loyalties. He laughs when I say that he loves shock and immediately tells me of his first trip to London to see the gallery where he’ll show. It’s the job of the artist always to surpass himself, he says. "When I was in London in a taxi or hotel, I taught my son to sing an old revolutionary song-with lyrics like’hacking the head off the Japanese invader with a sabre.’Then I would change the lyrics to ’hacking at my own head’ and tell my son that you always have to create a new self."

Perhaps Zhang offers a model for the wider Chinese art world: making Chinese culture new, not by abandoning the past, but by reimagining it.