Many who have lived and worked in China during the past 30 years have stories about the painting they could have bought for a few hundred dollars that is now worth hundreds of thousands. Geoff Raby, who was Australia’s ambassador to China from 2007-2011, had more opportunities than most, inhabiting a social circle that extended from top government officials to the lesser Bohemians. The only Australian ambassador to have visited all 31 provinces on official business, Raby was exceptionally well travelled. As an economist, he understood the rising value of Chinese art, but never let such thoughts influence his activities as a collector.

The Geoff Raby Collection of Contemporary Chinese Art, currently on display at the National Art School Gallery, reflects a philosophy of life rather than a master plan. Almost everything Raby acquired was the result of personal contact with artists and their peers. He has pieces by well-known figures such as Chen Wenling, Cang Xin and Li Jin, but has never been fixated on names or reputations. In the catalogue, he pays tribute to Ray Hughes, the fearless art dealer whose own omnivorous instincts served as an inspiration.

Raby’s first posting to Beijing came in 1986, when the ’85 New Wave was still breaking. In the late 1980s, exhibitions were held in studios, rented spaces and the homes of sympathetic foreigners. I remember going to one such event in Nicholas Jose’s Beijing apartment in 1989, roughly a month before the Tiananmen Square uprising.

Raby understood early on that in China no business is done without the necessary socialising to establish a basis of trust.

Some of the most fascinating parts of the Raby collection are those historical items that reflect the transition from the Cultural Revolution of 1966-76, through Deng Xiaoping’s era of reforms, to the sudden terminus of June 1989. An even earlier – and utterly irresistible – work is a revolutionary carpet by an anonymous weaver from Kashgar, dated 1942, that features a crude version of the Soviet-style motif of two heroic peasants holding a sheaf of wheat. The local touch is a camel in the bottom-left corner.

It was a lucky find in a carpet shop. Another piece of history is a copy of the poster made from Shen Jiawei’s Standing Guard for Our Great Motherland (1974), which was sent all over China by order of Jiang Qing, also known as Madame Mao. Today, as with so much of the material culture of that era, these prints are rare. The one in the Raby collection was a gift from the artist, who has lived in Sydney since 1989.

From these prime examples of propaganda art, we leap to the period of avant-garde experimentation in the 1980s, where we watch Raby’s collecting methodology take shape. Quite simply, he bought works from those artists with whom he dined, drank and socialised, such as Lin Chunyan and Guan Wei – the latter being another long-term Sydney resident.

This haphazard approach, putting life before art, lends the collection a good deal of charm. It may also be the key to Raby’s subsequent career in the private sector, working as a consultant and commentator on all things Chinese. He understood early on that in China no business is done without the necessary socialising to establish a basis of trust. One can’t simply fly in, seal a deal, and leave. Neither can one sit in Canberra and spout aggressive rhetoric about China, as some of our stupider politicians have done, and expect to maintain a healthy trade relationship.

Damian Smith, the curator of this exhibition, writes how Raby told him that to work effectively in China one has to be able “to accommodate contradiction”. This is a fundamental but acute insight. Chinese people grew accustomed to accommodating contradictions during the Mao era, when people would monitor the daily papers to see whether the Party line had shifted left or right overnight. Be slow to respond and one could quickly go from being a leader to a traitor, from a hero of labour to a capitalist roader – involuntary transitions with dire consequences.

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Artists too have become adept at riding the contradictions, learning when one can be a little more provocative, and when it’s smarter to pull back. Sometimes it’s better to put the social critique aside for a while and paint landscapes. At the very least, it’s wise to have an anodyne interpretation ready for a work that may be read (correctly) as a political comment. Chinese contemporary art is full of great survivors, who have been able to adapt to periods of alternating repression and liberalisation. At present, it’s a repressive time, but the Chinese art scene continues to thrive. It’s not unusual for leading artists to have a base in some other country, which doubles as an escape plan if things get too difficult at home.

In the Raby collection, one can chart those years when artists had more freedom and were able to take on social and political topics, occasionally in a savagely satirical form. Li Dapeng’s cartoonish pig faces, such as the one in Standard Head (1997), which wears an army cap, would probably be considered too confronting today. Sheng Qi’s The Movement (2001), which shows a protest march, would be way out of line.

The repressive tactics have grown a little softer over time. For the most part, if a work is deemed offensive, the artist or gallery is discreetly requested to take it down. It requires quite an effort to get oneself banned or arrested, but Guo Jian managed this feat in 2014 when he made a scale model of Tiananmen Square, covered it in rotting pig meat and did an interview with the Financial Times. As an Australian passport holder, he was deported to Sydney and is no longer welcome in his native land.

Today, given the more ruthless treatment meted out to Australian citizens born in China, one might say Guo Jian got off lightly for his act of defiance. He is well represented in the collection, by both his early “army” paintings and a glowing, cast resin sculpture of a brain with bas-relief erotica, called One Word, One Dream aka Dirty Mind (2004).

Another confronting piece is Xiao Lu’s Dialogue (2004), a coda to a notorious work of the same name, that saw the artist fire a gun at her installation in the China/Avant-Garde Exhibition, held in Beijing in 1989. She succeeded in getting the show closed down and herself arrested. The photo in this exhibition, in which Xiao Lu points a gun at the viewer, makes the point that her gesture is just as relevant 15 years later.

Raby pushes the boundaries with works from Tibet, by artists such as Gonkar Gyatso and Jhamsang, and the striking abstract work of Uyghur artist Aniwar Mamat. His other controversial preoccupation is erotic art, of which there was an explosion when artists realised they were no longer shackled by the Puritanism of the revolutionary period. There’s a cheerful vulgarity about much of this work, although the sexual politics remain slightly dubious. At least one piece, Rose Wong’s Untitled (2016), could be seen as a feminist kickback, being an oversized sculpture of a hand grenade, split in two like a ripe fruit, to reveal female genitalia.

The keynote image of the show, which has been reproduced over and over, is a compendium of themes. Chen Man’s photo Ms Wan studies hard (2011), shows a glamorous young woman on a bicycle, speeding across Tiananmen Square, carrying a huge pile of books held precariously in place by a Christian Dior ribbon. It’s an image that is at once sexy, but also assertive of female power. Ms Wan is representative of a new generation of Chinese, who can be simultaneously fashionable and intellectual. In her appearance and her reading matter, she blows away the homely image of those women in Mao suits, whose only study was the Little Red Book. It’s an icon of the gentle art of accommodating contradiction.

In Our Time: Four Decades of Art from China and Beyond, The Geoff Raby Collection is at the National Art School Gallery until March 30.