Ready to Pair: The couples in Summer Palace unite to weather China?s turmoil.

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Life is (relatively) free and easy in the first third of Summer Palace, Lou Ye’s exceptional account of a lost generation of Chinese students. The director is best known in the West for 2000’s Suzhou River, an arty riddle of a film about suspect identity and erotic fixation, and for a time the new film cultivates a similar tone. But the vibe soon turns foreboding: Summer Palace is set in Beijing in 1989, as student protesters are gathering in Tiananmen Square. How long until they’re crushed? And, to pose a question a less daring filmmaker would have sidestepped, what happens afterward?

At first, the film resembles such other recent Chinese discontented-youth pictures as 2002’s Unknown Pleasures and 2005’s Peacock. It’s distinguished mostly by its restless camera, masterful editing and framing, and a sexual candor unprecedented in the country’s cinema. (There’s even a fleeting shot of full-frontal nudity.) Impulsive Yu Hong (Hao Lei) lives in provincial Tumen, near the Korean border, and has a casual boyfriend. (We see them having sex before the film’s title appears.) Yu leaves her hometown to study at Beijing University and is soon pulled into the orbit of Li Ti (Hu Ling). Both live in the same shabby, teeming women’s dorm, where each room holds four students and secrets can’t be kept for long. Yu meets Li’s boyfriend, Ruo Gu (Zhang Xianmin), and then Ruo’s friend Wei Zhou (Guo Xiaodong), with whom she has an intense but intermittent affair. Yu and Wei are made to make each other unhappy, a perverse bond that survives the Tiananmen crackdown, Yu’s return to Tumen and a hop to Berlin, where several of the major characters observe the unraveling of European Communism. The spirit of liberalization, cruelly suppressed in China, triumphs in Germany, which both attracts and alienates the Tiananmen Square survivors.

The film’s exhilarating early sequences convey the elation of new ideas, of sexual awakening—Yu teaches a straight-laced roommate how to masturbate—and of political ferment. It also shows how private revolutions feed the promise of a public one. Qing Hua’s hand-held camera rushes after and around the characters, and the natural-light compositions exalt deep shadows and sensuous light. Lou sometimes ends scenes before they’re resolved, as if he’s as impatient as his characters to get on with life. The complex sound mix blends ambient chatter with Chinese and Anglo pop and Peyman Yazdanian’s spare but dramatic score; Toni Basil’s “Mickey” or Frankie Valli’s “Can’t Take My Eyes Off You” briefly surface, but it’s not clear who’s listening. When the Beijing University students first surge to Tiananmen, a Mandarin pop song plays, while the kids sing a different tune. The era when everyone warbled the same panegyric to Mao is over.

In addition to making the first Chinese film to address the Tiananmen crackdown—a politically hazardous move—Lou takes some major aesthetic risks. Although played with verve and insight by newcomer Hao, Yu is moody and not especially sympathetic; she’s a mystery to herself and her friends, as well as to casual observers. (“You know they’re all talking about you,” Li tells Yu at their first meeting.) The full-immersion style of the film’s first section, which covers less than a year in Yu’s life, slows to a quieter, more elliptical approach for the final chapter, which recounts the following decade. The gravest narrative danger is placing the Tiananmen incident at the center, with more than an hour of Yu, Li, and Wei’s story yet to come. Brilliantly evoked with a mix of archival footage and tightly framed crowd shots, the attack on the protesters would seem to be the film’s natural climax. Yet how to live in the aftermath of the massacre is Summer Palace’s primary concern. Most people endure fading youth, but for Yu and her friends the disenchantment is intensified by the failure to transform China’s autocracy.

Written by Feng Mei and Ma Yingli with the director, who was a student in Beijing in 1989 and later lived in Berlin, the movie is no political tract. It invokes such ’80s dissidents as Václav Havel but doesn’t articulate an anti-Communist agenda. Indeed, some Western reviewers have criticized Summer Palace—which doesn’t have a U.S. commercial distributor—for devoting less than 20 minutes to the student uprising and lacking a tidy pro-democracy message. The Chinese government better understands Lou’s achievement: It banned the film and barred its director from filmmaking for five years, ostensibly because he sent the movie to Cannes without government consent. Summer Palace is that powerful, both as storytelling and stimulus. Its tale of 1989’s failed revolution has enough juice to make party elders worry that it might inspire another attempt to rock Tiananmen Square.