I Am China by Xiaolu Guo, book review: A beguiling tale of love and exile offers an indictment of China's past, and present

Xiaolu Guo has already established herself as a leading young talent today. Born in a south Chinese fishing village and now resident in Hackney, seven novels before her 40th birthday secured her a place on Granta's list of the 20 most promising British writers last year.

If all of that was merely promise, then her new novel, I Am China feels like promise fulfilled: a book so piercingly urgent and relevant it is as if Guo has not so much published it as pressed it into your hand the very moment after writing the final sentence.

The story follows a young translator living in London, Iona, who is presented with a pile of Chinese diary entries and letters by a publisher, with little explanation as to their importance. They belong to a pair of lovers: Kublai Jian, a Chinese rock star and would-be revolutionary with a mysterious past, and Deng Mu, a "moon-faced girl" born to a peasant family in southern China, who meet at university in Beijing in the 1990s, shortly after Jian has spent the day of the Tianenmen Square massacre "in his empty dormitory listening to the Sex Pistols".

Many years later, we learn from his letters to Mu, translated by Iona, that Jian is in a jail outside Beijing. For now, Guo tell us little more than the fact that he has written a manifesto, distributed it at a rock concert, been arrested, and exiled.

What follows is a kind of epistolary detective story, with structural echoes of A S Byatt's Possession, as Iona unpicks the story of Mu and Jian, discovering them alongside the reader.Throughout, what truly astonishes is the scope of Guo's insight and vision. In a narrative that always feels anchored in Jian and Mu's story, the action shifts from Beijing to London, America to France, a "white-grey" asylum centre in Dover to a Cretan beach: Guo's writing brings each setting intimately to life.

The world, seen through the eyes of her young Chinese lovers, is not a kind place. In exile, from China and from Mu, Jian staggers from prison to European detention centres and bedsits. The juxtaposition of these scenes with Iona's stable, albeit lonely London life feels intentionally jarring. Beneath the surface appearance of modern Britain, where nights "ooze into the soundscape of late-night television dramas and the passing wail of sirens", Guo shows us the visceral instability of life as it is lived by people who aren't born citizens of a free, tolerant country in stable times.

As Iona gets closer to the truth about her subjects, they begin to cast a new light on her own life. The oppression that they experience begins to seem no more suffocating than the "white-greyness" of British modernity, in "a country made stale by history". In an early scene, a political protest passes near Iona's flat and she shuts the window, unable to face "relentless bad news". By the end, having seen the human story behind present political oppression, she resolves not to live "a trivial life".

Oddly, the novel spends less time in China itself. Yet through the device of the lovers in exile, Guo has crafted a novel which is both a hymn to the country, and a protest aimed at its governments – of the recent past and the present: of leaders of a state who suffocate art and artists. Jian himself is a kind of fictional mirror of figures like Ai Weiwei, and maybe even Guo herself, for whom, as Jian writes, "art is the politics of perpetual revolution".

I Am China is, however, no hard-edged political tract. The sections are divided up by fragments of Chinese poetry and a sense of myth and tradition echo behind the words that Jian and Mu write each other. The end of their story is heart-wrenching: a fitting conclusion to an extraordinary and important book.