Before the trio were detained, Huang shows, China was moving "fast and far" towards a laissez-faire home-grown entrepreneurial economy, founded on the rural-based capitalism of township and village enterprises. But that free economy, which created China's true economic miracle, was swept away soon after Tiananmen in 1989, and its place taken by "crony capitalism", built on foreign investment, "systematic corruption and raw political power", in which property rights, the basis of lasting economic progress, are not secure.

As for Shanghai, the city praised by Western businessmen as a model for China's future, much of its success is based on foreign investment, regime-based land-taking and the impoverishment of the poorest 10 per cent of the population. Shanghai's accomplishments, Huang observes, are built on a "Potemkin foundation".

Huang's research is based on his close examination of banking information beyond the grasp of most foreign observers. He argues that China's foreign fans are wowed by flashy tall buildings, shopping malls, up-to-date fashions and high-speed transport, which he derides as tourist impressions. These fans are being misled by their maladroit examination of Gross Domestic Product statistics.

Huang attacks some of them: Nobel Prize winner Joseph Stiglitz; Jeffrey Sachs, a universally-admired academic expert on economic reform; the World Bank's Beijing office; McKinsey consultants; and the authorities and businessmen who hail China as a star of the East Asian miracle. More recently, there is Harvard's Niall Ferguson who wrote in this magazine in September: "China's planned economy seems unlikely to be significantly affected by that [US] slowdown because net exports are no longer the key driver of China's growth."

The new capitalism of the 1990s, Huang shows, imperils rural welfare. Two key examples are illiteracy and health. Thirty million new illiterates are being added annually for the first time in the history of communist China. The government now invests relatively little in education and, as they become poorer, rural Chinese cannot afford to educate their children, especially girls.