In 2006, the Yue Festival was only the second or third live music festival in China, with Splitworks bringing over international acts including Faithless and Talib Kweli to play alongside Chinese bands.  This year alone, however, there will be 70 festivals in China, many backed by the government, and one of which saw Sinead O'Connor last month perform in the ancient silk town of Suzhou as part of a promotion for a canny property developer.  "When I got here four years ago, the only live venue in Shanghai was Yuyintang, which had started four months earlier [tacked on] the side of Ikea. It was just a shed, with a room about twice the size of my office with no fridge. They served beer out of a warm bucket. There was no decoration or furniture and the toilet was a trough. That was the only live venue in a city of 20-odd million people," says Mr Hamilton, who is 34.  Even though in a 1956 speech to China's National Association of Music Workers, Chairman Mao said: "If we do not know how to listen to foreign music or how to play it, this is not good", the Communist party remains unsure about live music, with all the avenues for unscripted mischief that it opens up.  In the 1980s, as young Chinese became disillusioned with official songs and music, Chinese rock music started to become popular, drawing on folk songs from the nation's gritty north-west (a genre called Northwest Wind) and then becoming overtly political, with prison songs and ballads expressing the frustration of the generation. Nothing to my Name by Cui Jian, became the unofficial anthem of the Tiananmen Square demonstrators.  After the protests, the authorities allowed gigs to be held in large venues. As the years passed, however, the screws tightened again and concerts were restricted to a handful. Performances by international artists, meanwhile, have been tightly controlled since Björk, the Icelandic singer, topped off a performance of her song Declare Independence in Shanghai in 2008 with the shout: "Tibet! Tibet!"  Instead, says Mr Hamilton, music is now fed through television. "The government pushes entertainment through its official media channels, CCTV and Shanghai Media Group. This is not a society of rebels. They have big gala performances where they bring 30 stars to sing one song each in rapid succession, mostly on playback," he says.  Meanwhile, the emergence of Chinese bands has been limited by the absence of any real market for music. Chinese fans download music for free, and rarely have the money to pay for gigs, for drinks, or even a taxi home. Splitworks lost "a ton of money" on the Yue Festival, Mr Hamilton admits.  Kevin Fritz, the director of Wasted Orient, a documentary about Chinese rock, says: "It's not glamorous. It's filthy. It's filled with despair. It's very unwanted in that society and is shown in its citizens' apathetic response to it."  To fund its business, Splitworks turned to sponsorship, taking money to give international brands another outlet into China. "Television advertising is incredibly expensive, and so is print and there is no editorial. So as a brand your options are limited. My idea was to give brands an experiential option. I wrote a proposal basically saying: 'Do you want your brand to be responsible for the creation of live music in China?' "  The idea came from the snowboarding and skiing festivals Mr Hamilton had thrown in Chamonix years earlier. "The big brands had got really excited by extreme sports in the late 1990s and we were there taking speakers up the mountain and creating a party and the brands started throwing hundreds of thousands of dollars at us. Over time, we ended up developing metrics to demonstrate return on investment and so on."  After the financial crisis, however, the money dried up. "We had $15m (£9.7m) of deals taken off the table," says Mr Hamilton. "We nearly folded four times last year." He poured his own money into the company to keep it going, believing the recession would be shallower in Asia.  "It focused our minds. Money was loose up until November 2008. Particularly in China. People were spending it without focus. They were thinking 'we just have to grab this market, so let's spend and it will come back to us.' It was that classic internet bubble mentality. But let's face it, that has never worked for anyone. Everyone is now more circumspect," he says.  Then there are the restrictions. "We actually built our first venue," says Mr Hamilton. "We took a place without the proper permits and so on. We couldn't actually apply for them. To do an international show you need a contract with a venue with a performance licence. But it is very hard for venues to get a performance licence because they need to spend a lot of money complying with the fire department and the public security bureau. And the local government prefers to keep you in the grey zone. That way, if things get too rowdy they can shut it down, cut it off at the knees. If the locals complain, they do not need to go through a legal rigmarole to turn off the power," he adds.  Being fully legitimate according to Chinese law is difficult, expensive and time-consuming for British businesses, but Mr Hamilton has some advice: "One of the great things is that China is a very good place to ask for forgiveness." Over the years, as live music has successfully grown in China, it has become "part of the psyche and the infrastructure", he adds. "If you make a success of it, Chinese companies will come in and legitimise the entire industry because they want a piece of it."  The key piece of advice for entrepreneurs, says Mr Hamilton, is to remember that the Chinese begin negotiations only after they have signed a contract. "We booked the Shanghai Theatre for Sonic Youth in 2007, and they seemed happy with a fee of 40,000 renminbi (£4,000) for the rent of the venue. So we started the marketing, and the wheels were turning, and we had a contract with the band, so we couldn't back out. Then they came to us with a demand for 350 seats 'for government' out of our 1,600. We gave it to them. A week later they asked us for 20pc of the total, sold-out, gross, in advance as an extra fee. That was before we had sold any tickets," he says.  Eventually the gig sold out, bar 120 tickets. Could Splitworks use the box office to sell those on the night? "Certainly, they said, for another 20pc." He laughs: "So you know we lost a bit of money, but we had a great time and the show was awesome."
The Middle Kingdom may not yet have a Glastonbury or V Festival, but Archie    Hamilton's company Splitworks is doing its best to promote a fledgling live    music scene.