City had taken a first-half lead through Sergio Aguero, only for Arsenal to respond with fine goals from Jack Wilshere and Alexis Sanchez before veteran defender Demichelis earned the Premier League champions a point.
Danny Welbeck was presented with an early chance to vindicate his selection as Arsenal’s main striker when he seized on David Silva’s poor pass, but the deadline day signing’s dink over Joe Hart came back off the post.
Arsenal were in the ascendancy in the first half, but were rocked on their heels on 28 minutes when City broke with pace and Jesus Navas’ excellent low ball into the box was cleverly finished by Aguero.
The home side levelled on 63 minutes when Aaron Ramsey played in Wilshere, who skipped past former team-mate Gael Clichy before lifting a delightful shot over Joe Hart into the net.
Wilshere turned provider for Arsenal to take the lead on 74 minutes when he headed the ball back into the box after City could only partially clear and Alexis steered a firm volley beyond Hart.
England midfielder Wilshere appeared fortunate not to concede a penalty for handball and, after Mathieu Debuchy was stretchered off, City struck back with seven minutes to go.
Substitute Aleksandar Kolarov curled out a corner and Demichelis rose unmarked to head beyond Wojciech Szczesny, who appeared to touch the ball away from the covering Mathieu Flamini.
Welbeck whipped an effort narrowly wide in his last act before being substituted due to injury, Kolarov thundered a shot against the post, Laurent Koscielny’s clearance hit Edin Dzeko before bouncing back off the upright and former Arsenal midfielder Samir Nasri saw a goal disallowed for offside as six minutes of added time failed to yield a winner.
Frank Lampard made his City debut after Yaya Toure played for the Ivory Coast in midweek but he lasted only until half-time, with a foul on Ramsey that earned a yellow card his headline moment.
Ramsey started in Arsenal’s midfield after recovering from an ankle injury, but all eyes were on Welbeck’s first appearance for the Gunners.
His first touch was greeted with a roar of approval from home fans and expectation continued to grip Emirates Stadium as Alexis tested Hart from long range.
Somehow Aguero threaded a path between three defenders, but the angle was too tight to produce a meaningful shot and Arsenal immediately renewed their offensive.
Welbeck failed to connect with Mesut Ozil’s delicate pass and moments later the England forward had a glorious chance to put Arsenal ahead after intercepting Silva’s ill-judged back pass. Only Hart stood between Welbeck and a debut goal but his attempted chip drifted on to the left post.
Arsenal had bristled with intent in a superb start, but City’s ability to threaten on the counter was highlighted when Navas broke clear and forced a key clearance from Per Mertesacker.
Moments after Alexis had almost ghosted through City’s defence, the champions struck a clinical opening goal after a 50-50 clearance in midfield looped over to an unmarked Navas on the right wing.
The Spaniard set off and delayed his pass perfectly for the arriving Aguero to slide his shot past Szczesny.
Szczesny then had to prod clear a shot by Silva after Pablo Zabaleta exploited Arsenal’s left flank – and particularly outclassed full-back Nacho Monreal – once again.
Aguero’s goal had clearly deflated the Gunners and it was not until the opening exchanges of the second half that they threatened again – only for Zabaleta to prevent Welbeck from reaching Alexis’ cross.
Just as Arsenal appeared to be fading once more, they struck a 63rd-minute equaliser through Wilshere.
Aguero lost the ball in midfield and Alexis pounced, threading a pass to Ramsey who found Wilshere. The England international still had work to do, but he expertly rounded Clichy with a wonderful touch before lofting the ball over Hart.
And 11 minutes later Wilshere was involved as Arsenal surged ahead through Alexis, who volleyed his team-mate’s header into the net after a failed clearance from Vincent Kompany.
Demichelis capitalised on poor defending to plunder City’s equaliser and Arsenal were relieved to see the flag go up after their former player Nasri stabbed the ball into the net in stoppage time.