Wu's ordeal began on July 4 last year, after he joined two Hong Kong friends and business associates at the St Paul nightclub in Shenzhen's Futian district. Police raided the club late that night in search of drugs and Wu was taken to the Yuehai Police Station, along with about 20 others who were in a private room with him at the nightclub.

When the police asked him for his identity card, he showed them his New York state driving licence because he was not carrying his American passport. The police did not believe he was an American and locked him up with the other detainees.

In the morning, the police captain checked Wu's identity again and confirmed he was an American and not a Chinese citizen. Then the police captain left for lunch.

After the captain left, three men wearing police badges went to the holding cell and demanded that everyone sign their names on a piece of paper. Wu was the last to do so, and he signed in English as Michael Wu.

'The guy asked: 'What is your signature? This can't be your signature, your real name.' I told him I must sign in English, that is my legal name,' Wu said.

This angered the trio and Wu was knocked to the floor. They beat him, broke his glasses and kicked his hip and leg.

'I was thinking, this is the worst thing that can happen to me in my life,' Wu said. 'I could see there was no safety guarantee. Most of my friends have said I'm lucky that I am an American, because otherwise I may have just disappeared.'

The attack was witnessed by about 20 people arrested with Wu, but they have declined to speak to the South China Morning Post.

'They had a handcuff on my left hand,' he said. 'I told them, 'I can't stand up, my leg is broken'. But they thought I was still joking, so they left me on the floor for three hours. I was in a lot of pain. Finally the police doctor came and said it was very serious and that they had to call emergency.'

Doctors at Nanshan Hospital diagnosed his injury as a dislocated hip and sent him for emergency surgery to repair it.

While he was unconscious after the operation, the doctors took a urine sample, which the police say tested positive for the drug ketamine. Wu denies taking drugs, and his lawyers say the test was illegal.

'We can't recognise the urine test result because it was taken when Mr Wu was in a coma,' Wu's lawyer, Zhang Jian, said. 'According to Chinese law, police can't beat Mr Wu, whether he's a drug abuser or not.'

After Wu spent two days in traction, the doctors realised that the head of his right femur, which sits inside the hip socket, was broken. They wheeled him back into the operating room to realign and screw the bone together. He remained in the hospital for nearly nine months, leaving only in March.

Doctors now tell Wu that the broken bone is not healing and may be dead. He has been advised to have hip-replacement surgery. Wu sought a second opinion from doctors at the Columbia University Medical Centre in New York and their conclusion was the same as that of his Chinese doctors.

'I've had two operations in China and they both failed,' Wu said. 'I want to have the hip-replacement surgery back in the US.'

The attack put a stellar scientific and financial career on hold. After graduating from Wuhan University with a degree in biology in 1987, Wu was accepted by five universities in the US. He enrolled at Weill Cornell Medical College in New York and earned a doctorate in cell biology. He then worked at The Mount Sinai Hospital as a researcher for three years before leaving for Wall Street, where he was hired as a biotechnology portfolio manager. He soon returned to academia, this time at Duke University, to earn an MBA before joining Credit Suisse First Boston, where he invested the bank's money as a proprietary trader. In 1998 he became an American citizen.

In 2000, a Chinese financial delegation visited New York and Wu helped organise their reception. Through that meeting he was invited to return to China as a foreign expert to help build its growing financial sector. He returned late in 2001 and joined China Merchant Securities to negotiate a fund-management joint venture with ING. He appeared on CCTV as a financial expert and eventually opened his own Hong Kong-based hedge fund.

Now Wu spends his days in his Shenzhen flat, where he does some day trading occasionally, but spends most of his time distracted by the pain of his injury. His hedge fund is defunct and he has not returned to work since the assault occurred. Because of the pain he cannot sit or stand for long.

'I'm feeling bad. I helped those people set up the joint venture. I contributed a lot to China. I care about China a lot. But my career was destroyed by those same people.'

The three men who beat Wu were found guilty of assault in October last year and jailed for six months, a police spokesman said.

'The short-handed police hired security guards to maintain order after a large number of customers were taken away from the St Paul nightclub,' the spokesman said. 'Three security guards quarrelled with Wu and assaulted him when he refused to write down his Chinese name.'

The police contacted Wu's lawyer Zhang just before the Lunar New Year this year and said they wanted to resolve the issue before the festival. They hinted to Zhang that they would compensate Wu with 2.5 million yuan (HK$2.9 million), so the lawyer prepared documents to that effect.

'I thought: 'OK, let's get this settled before the festival',' Wu said. 'That would cover the medical expenses at least.'

But then there was a management shuffle within the police ranks and the expected settlement did not materialise. Instead, the police department paid about 76,000 yuan to cover his medical bills in addition to offering him about 29,000 yuan in compensation.

'Although Mr Wu is an American citizen, all compensation is paid in accordance with Chinese laws because the case happened in China,' the police spokesman said.

In July, Wu filed a lawsuit in the Nanshan People's Court, suing the police for US$12 million.

'It's a reasonable request by Mr Wu, as a US citizen, to receive better medical treatment at professional hospitals in the States,' Zhang said.

'US hospitals estimate that the treatment will cost US$904,523, and the police should also compensate him for economic loss, disability and mental injury.'

Wu said the US embassy in Beijing had sent diplomatic notes to the Shenzhen and Guangdong governments as well as various police departments, and requested permission to send a representative to sit in on the court hearings. The court denied the request, saying there was not enough time to arrange it.

'China's economy has changed a lot, but the human rights situation has not changed at all,' Wu said. 'It is even worse than it was. There is definitely some systemic risk for foreign people who come to live here. If something happens to them, there is nothing to protect them.'

Additional reporting by Fiona Tam