In his new book, Capitalism with Chinese Characteristics: Entrepreneurship and the State (Cambridge University Press, 2008), Huang stresses that he now believes that the stupendously corrupt foundations of current Chinese growth are unsustainable. Many manufacturers have been exposed as having "committed fraudulent business practices [toys, toothpaste, pet food, powdered milk] in order to skimp on costs". Looking forward to 2008, long before the American Treasury and banks did, Huang brilliantly foresaw an American recession, "even a subprime crisis", and rising energy costs. "The issue," he warned, "is whether such developments would trigger [Chinese] financial instability in the form of a crisis." Now 2008 has passed, the southern factories are closing, China's stock market has dropped by 66 per cent, and the Chinese crisis has arrived as Huang predicted.

Huang's book is that rare thing, a conceptual earthquake. Its dedication encapsulates its theme. Huang names three Chinese he has never met. In 1982, Nian Guangjiu, a farmer from a poor province, began selling a particularly delicious version of the popular snack, roasted sunflower seeds, which he called "Idiot's Seeds" because he had a low opinion of himself. Soon, he was well on the way to becoming a corporate giant. The other two dedicatees, both from provincial areas, are Sun Dawu, who ran an animal-feed company, and Zheng Lefeng, an illiterate female

moneylender. In 1989, Nian was arrested for corruption and embezzlement, charges so flimsy, even by Chinese standards, that he was recharged as a "hooligan" who had had "immoral relationships" with 10 women. Nian reportedly replied, "No, 12." He was sentenced to three years' imprisonment and his business was closed down. Sun was imprisoned for "illegally absorbing public funds". He had refused to bribe bank officials. He is remembered for his remark in prison: "Chinese peasants, your name is misery." Zheng Lefeng was executed.

Huang says of Nian, Sun and Zheng that "millions like them created the true Chinese miracle". But they "met the common unhappy fate of being brought down by the illiberal policies of the 1990s". Nian, Sun and Zheng were smashed, as the Chinese say, because they made money while free of state control.