Filmmaker and fiction writer Guo Xiaolu was a schoolgirl in a fishing village in southern China when the Tiananmen Square student protests erupted 25 years ago. She was 15, and desperate to join her elder brother, a Beijing student on hunger strike.

"He was in the square, calling back home, 'We've quit eating. We're putting up tents,'" she recalls. "I was enthusiastic. I believed China would change, or at least we'll have democratic elections."

Her parents held her back; her artist father had spent 15 years in a prison camp in the 1950s and during the Cultural Revolution for wanting to paint. "But we thought, 'It's the 80s now.'"

Her brother survived the tanks and bullets of June 4, 1989. But, when Guo arrived at the Beijing Film Academy four years later, the long purge was under way.

"Older students were taken away to write confessions. It took 10 years of investigations for them to be punished. I had revolutionary ideas, and we wanted to protest. But people were too scared."

I Am China, which was published this month (and featured in The Review last week), on the crackdown's 25th anniversary, charts the dark aftermath of Tiananmen through the story of a punk rocker in Beijing and his poet lover, separated by political upheavals. When we encounter the musician immured in a psychiatric unit, then entombed in a "grey-white box" in a detention centre, he is in Britain in 2012 as a stateless "non-person" - a term "so absurd it sounds almost Chinese to him".

Guo, who came to London in 2002 on a scholarship to the National Film and Television School, was rejected at two appeals after her visa ran out, and faced a stark choice: "Either you go back to China, or you go to prison. But I had a political problem [in China] with my first documentary" - The Concrete Revolution (2004), which followed rural construction workers toiling on venues for the 2008 Beijing Olympics. The programme won the grand prix at the International Human Rights Film Festival, in Paris, France.

Deported to Beijing, Guo returned to Britain after three anxious months, saved, she says, by an expensive immigration lawyer and a campaign. "I saw one letter from [author] Salman Rushdie and one from George Galloway" - her local member of parliament. Despite such support, anger pulses beneath the novel.

"I couldn't trust any state," she says. "I can't believe anything's freer in one state or another - it's just degrees."

In only a dozen years, Guo has made 10 films, garnering major awards, and written four English-language fiction books. Two of her six Chinese-language novels have been translated. Village of Stone, which drew on her childhood by the sea, was shortlisted for newspaper The Independent's foreign fiction prize in 2005. A Concise Chinese-English Dictionary for Lovers, a glossary of misunderstandings in language and love written in the artfully improving English of a newcomer, was Guo's first book in her second language. It made the Orange prize shortlist in 2007 and has been translated into 24 languages. Last year, she was named one of Granta magazine's best young British novelists. Her narratives are fragmented and funny, if bleak. She says her six documentaries were "financed on my credit card" - "I'm more in my films than my books."

We meet in Hackney, east London, to where she returned last year after wandering in Paris and Berlin, Germany. In her new flat, a row of baby shoes awaits the return of her 18-month-old daughter, Moon, from Melbourne. Guo's partner, Stephen Barker, who teaches philosophy at Nottingham University, is Australian.

Turning 40 last year, "I felt I [had] really aged," she says, in rapid-fire English that is eloquent, if imperfect. Her parents died of cancer within months of each other, "and I couldn't go back". She had forfeited her Chinese passport in gaining a British one. Her grief overflowed into motherhood. "I was so worried this baby would die any second," she says.

"Baby Moon is very famous round Hackney," she says proudly.

Though Guo used to be "anti-family - a hard-core militant feminist", Moon has made "reality much softer".

"It's a confirmation of life," she says, "to get rid of this barrenness in my heart."

Her current neighbourhood features in Late at Night: Voices of Ordinary Madness, which premiered last year at the London Film Festival. A sister "film essay" to her 2009 Once Upon a Time Proletarian, interviews with 12 Chinese workers and peasants, the visual diary was shot in the East End over three years. She had felt "physically uncomfortable, as a migrant and as a woman, coming out of the tube [underground railway] at night, running home chased by beggars". Then she brought her camera.

"I wouldn't claim we became friends, but the hostile feeling was gone. I'm a very lazy filmmaker: I can't go to Latin America when this story is here below your window."

The documentary is her "humble version" of George Orwell's Down and Out in Paris and London. "I have an exotic interest in working-class people in England because of that book, which heated my blood."

Guo's new novel, which she discussed at the Hong Kong International Literary Festival in November, is her "goodbye love letter to China".

"I'll never write anything more about China, or dwell on the past," she says. It was her most painful book to write, "because it's so personal, so much death". The punk rocker's girlfriend, Mu, is a singer known as Sabotage Sister - an alias Guo herself has used. In the death of Mu's artist father, Guo anticipated her own father's demise.

"He survived 14 years with different types of terminal cancer," she says. "I was in a cafe writing his death and looking at my phone superstitiously." She had documented her parents' one trip outside China in the film We Went to Wonderland, presenting "two old communists from China who criticise everything in the West".

I Am China grew from a story, To the Queen From a Madhouse, a "very angry letter by a punk musician in exile who doesn't have a visa, and thinks, 'I'd better write to the boss'". The part-Mongolian guitarist Kublai Jian (Guo has him meet the Sex Pistols' Johnny Rotten) was partially inspired by a Chinese musician of the 80s, "one of the first rock'n'roll musicians doing political songs, who had a huge concert and was put in prison". Although Guo is cautious about naming the musician, her character shares traits with Cui Jian, the part-Korean "godfather" of Chinese rock'n'roll whose song Nothing to My Name became an anthem of the Tiananmen Square protests. And Cui is still standing his ground; in January, he withdrew from China Central Television's Lunar New Year's Eve variety special rather than bow to state censors.

Although today the mainland has its share of punk rockers, Guo sees the 1989 crackdown as a mortal blow.

"If he wasn't jailed, we could have had a punk movement. We might have become cultural China instead of GDP-growth China," she says.

As the novel's protagonists argue about political martyrdom versus compromise, audience or exile, the novel probes the relationship between the individual and the state, and the dilemma of artists. Guo sees the punk as a romantic idealist and his girlfriend as a survivor who wants to live an apolitical life.

"I think I was Kublai Jian. Now I'm trying to become Mu," she says. "I despise dying for your ideology. That's so sorrowful and trivial; it's a tragedy. My father's generation died for the ideological struggle. I hate that struggle, because I never feel free."

She wrote in defence of the 2012 Nobel Prize in Literature laureate, Mo Yan, when he was attacked for being too close to the government, arguing against driving a wedge between dissident and "state" artists.

"I respect artists who decide not to be political martyrs, but to keep their strength and find a metaphorical way to express themselves," she says. "I equally respect exiled political writers. I don't see that it's less noble. It's snobbish to say, 'He's not a political artist', when he's faithful to his wife and family. I'm less judgmentally terrorist now."

The lovers' story is pieced together by a Scottish woman in London, translating their letters and diaries for publication. Her flight from her Scottish isle to learn Chinese is, in a way, Guo's trajectory in reverse. But the character takes an almost parasitic interest in the lovers. Guo sees her as an "empty vessel".

"I see lots of young girls like that - a beautiful vase with nothing in it," she says. "I think I was like that in the village, desperately waiting for things to happen."

Unlike her more passive heroines, Guo's opinions can be like a blast from a blow torch. "I'm a very angry person. I'm better now; maybe getting older. Growing up in a traditional, communist society with very limited freedom, you're a spiky, angry rat."

Born in 1973, in Shitang, Zhejiang province, she had a "very remote relationship" with her parents, with whom she lived only from the age of eight. As an infant she was given away to a childless couple in the mountains of Zhejiang. Because she was ill, they sent her, aged four, to the coast, to her grandparents, who had a "violent relationship: she was some baby bride; he needed a third wife to be a maid".

Though her grandfather was a fisherman, her father chose art, and was sent to a camp "because he was bourgeois. He got out in 1971 and continued painting". She points to a vivid ink drawing on her kitchen wall, with houses in red wash. "He painted his fishing village all his life, and he loved colours."

Her childhood was spent "always lonely, reading. I felt that my heart was a hard rock; that I couldn't be warmed or kissed."

After attending film school in Beijing, she wrote fiction, which was censored ("I said, 'OK, delete'"), screenplays and "really bad TV soaps, like cop stories. It satisfied my egotistical need for expression because, when I was young, nobody listened to my stories."

Self-exiled in Britain, "I was an infantilised foreigner."

Her "sexual disasters" are seen with detached humour in Dictionary. "If you're a young girl from a foreign country, alone, you pay a huge price. But I survived." Casual sexual assaults punctuate her work, from the feature She, a Chinese, which won the Golden Leopard prize at the Locarno International Film Festival, in Switzerland, to I Am China.

"I know lots of women who live with abuse for years, in any country and culture," she says. "It's the ultimate alienation."

She writes in English because "I can't publish in Chinese - and who would translate?" None of her work - films or books - is available in the mainland (with the brief exception of Dictionary, which surprised her because of its unexpurgated sex scenes). But she bridles when people commiserate.

"What does it mean, a 'home country'?" she snaps. "I hate this national definition." Yet "because I tried to conquer a second language, it became the biggest mission in my life." She re-read in English "everything I had read in Chinese", including her beloved Marguerite Duras, Jean Genet and Boris Vian ("People said you're living in 1950s Paris").

In her novel, as the translator googles the lovers' lives, she hits the great firewall of China - the internet censorship machine - and sees her London publisher wavering under Chinese pressure to withdraw. Guo is scathing about "commercial censorship" in the West and resisted pressure from her United States publisher to cut a passage about abortion from Dictionary. She has "strong sympathy for how individuals suffer under any very political system - left or right, capitalist or communist - because my father suffered so much from prison, then got sick. I do believe, with [Jean-Paul] Sartre, that art should have social responsibility. But I see how painfully individual lives are affected by politics. That will always be in my books and films."

In light of the recent round-up of dissidents by Beijing ahead of the June 4 anniversary, her novel poses a question: "How can the individual grab power and become the state, rather than remain a trivial particle, going against it?"

"If I changed, I discovered the body of the state is impenetrable," she says. "Either you're a romantic teenager all your life, angry, hot-blooded, and you head towards death. Or you're indifferent and disillusioned, like my brother in middle age: you can have cars, houses, family, a great job, and be fat and unhealthy. Because I left this culture, I felt the need to think about it in a more distant way."

Yet with this novel, has she burned her bridges?

"At the beginning, I thought, 'How much should I show?' But I have lived with this fear most of my life. Maybe I've burned my bridges already." She looks sad.

"That's why I have to live in Hackney." She breaks into resilient laughter.

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