Then Dunhuang meets the enigmatic Xiaorong as she hawks fake DVDs by the side of a road. On his first evening of freedom, with nowhere else to go and following a beer-drenched hotpot dinner, Xiaorong gives Dunhuang her body and a bed. For a time, they cautiously enjoy a romantic and business relationship.

First, Dunhuang works alongside Xiaorong, counting the cash, canvassing business and serving as a bodyguard. Then he strikes out alone, pawning art-house films and hard-core porn to students and punters outside the universities.

follows Dunhuang as he struggles to survive - readers looking for much more of a plot than that will flounder. There are few cliffhangers or dramatic events. Rather, this slight book (it runs to just more than 160 pages) is an exquisite portrait of a city and its people.

Beijing, like New York in a Woody Allen movie, is a character in itself: it is the mecca that rural migrants flock to in order to make a new life. The city is rough, unforgiving and can swallow the unsuspecting and weak whole - but it also throbs with life and possibilities.

Many writers in the Chinese canon - including Yan Lianke and Nobel Prize winner Mo Yan - use absurdism and surrealism to hammer home their points about a country in crisis, often as a way to circumvent the censors. They tend to write about weighty historical events of import, such as the Cultural Revolution. But Xu never diverts from raw realism. He focuses on the small details of everyday life, not sweeping politics. His characters are pragmatic, matter-of-fact about their lot and cunning about how to get ahead.

Reality is also reflected in the weather: to the untrained eye, the dramatic meteorology in may appear histrionic. But, as anyone who has lived there knows, it is based on fact. Every spring, sands swagger from the wild Mongolian Plateau in the north to pour down on the ancient city. Pollution poisons the air with a metallic, toxic taste that makes the eyes weep and the nose itch.

The plumes of dust that Xu conjures up are a natural phenomenon, a result of building a capital city in a desert. They are also manmade, and all the angrier for it: this is the literal dirt of industrialisation whipped up by the factories and building sites that engulf the city. And as Dunhuang wanders the streets, the very storms he battles seem to mirror his own restlessness.

This is apparent in the title, . Being on the run is not a choice but a necessity (indeed, Dunhuang, almost childlike, aches to be anchored to the women he loves). It is an unfortunate component of the job. Even as Dunhuang squats on the side of the road, flipping open his case of DVDs to show to curious customers, he must also get ready to sprint if the police appear.

At one point, fed up of traversing the city by bus, he buys a second-hand Giant for a steal. The bike is pilfered and being sold on - something Dunhuang is only too aware of. He hesitates at first, knowing it is wrong to accept stolen goods, but finally succumbs to temptation and, delighted, whirs through the city on his new wheels.

Within a day, of course, the bike is gone: Dunhuang himself has fallen victim to the underground bicycle thieving trade. Resigned and furious with himself, he vows to run across Beijing instead, dropping off DVDs at clients' homes as he goes. One title that he sells is , a film that makes little sense except that it visualises the urge to just keep moving.

In the media, much attention is given to the recipients of China's miraculous economic boom: the billionaires and millionaires and first-generation rich. Xu has taken a long hard look at those who are usually overlooked: the prostitutes, the hawkers, the street peddlers. In lesser hands, they would be portrayed as mere victims of an unfair, dog-eat-dog society, the shrapnel of China's shift from socialism to capitalism.

Yet Xu is clever enough not to pity his protagonists or to use them as puppets to make grand larger statements. Instead, he gives them agency and choice. Dunhuang, we feel, relishes a challenge. Early on, with no idea where he will sleep for the night, he lights a cigarette and whistles "to buck his spirits". He concludes: "This wouldn't kill him."

Such verve saturates the book. Dunhuang may be poor but he is steely, ambitious, and works hard. He is also proud. After one night in an abandoned dusty hut sleeping on a bed of old newspapers he orders an egg crepe for breakfast, which the vendor gives him for free. Enraged, he screams "I don't need your pity!", tossing the crepe on the floor and the money on her cart. Then he strides away, his gait awkward and his back stiff, "like a tragic monster". It is only later that he realises his face is covered in dust punctuated by two clean tracks left by his tears.

Just as he searches for intimacy with Xiaorong, and later Qibao, a girl so feisty she appears to have been born of a fox spirit, Dunhuang remembers Bao Ding in jail and swears to make enough money to bribe his way out.

Friends in his circle of counterfeiters and jailbirds sleep around; everyone seems to be having sex with one another's partners. But camaraderie and loyalty between the street hawkers is also touchingly, surprisingly strong as they abide by their own codes of friendship and rally together to defend their livelihood against the authorities who want to take it away.

Love is both present and messy. Xiaorong longs to move back to her village where she can have a child and a home of her own. Her long-term boyfriend, Kuang Shan - who re-emerges later in the novel - is scornful about her desire for "a husband, a kid, and a hot brick bed. It's a peasant mindset!"

Only in the city, he insists, can they make something of themselves.

By contrast Qibao, Dunhuang's other love interest, scoffs at commitment and thrives in urbanity. She hides a secret, but never feels sorry for herself. As she sees it money - made by any means possible - is the only route to independence. Tough, sassy, smart-talking, Qibao is an easy match for Dunhuang.

Yet for all this, she also shows devotion. After one argument, Dunhuang walks off incandescent, smoking and discarding his cigarette butts. Qibao follows him. She picks them up one by one until they finally go home together, defeated, exhausted, reconciled to their bond.

Wound into these small moments that make up a life is haughty Beijing slang mixed with lyrical language, both beautifully translated by Eric Abrahamsen. Xu can conjure up an atmosphere or a character with just a handful of words. The wind is "like a crowd of children … weeping outside the window". One pudgy boy applying for a master's degree at Peking University's department of foreign languages has "a fat, foreigner-loving face".

Ultimately, works beautifully because it is tender without being romantic. Dunhuang is no dud: he quickly acquires business acumen, steadily building up his DVD sales, and starts to read film criticism books for fun. He loves the best of the movies he sells and in another book, this might have led him to a bright future. But this is not a Cinderella rags-to-riches tale. There are no easy solutions or neat endings.

Dunhuang never succumbs to the dust devil. During one vicious tempest, 300,000 tonnes of smut showers down on Beijing, encrusting the trees, buildings, and ground with a sickly yellow icing. Rather than sit down defeated, Dunhuang uses his fingers to paint temporary advertisements for his wares on car windows, creating characters in the filthy film. Even in the eye of the storm, it seems, lies opportunity.