For months following the arrest, security agents were posted at the front and back doors of Wu's home, to monitor anyone who might want to meet with his wife, Xu Jiehua. In an interview in a Chinese newspaper, she acknowledged that her husband had done business with a local factory owner and, when the boss failed to pay him, had forged authorization on his invoice to try to get the money. But she denies that Wu did anything wrong. "They just want to shut him up," she told me over the phone.

China's leading environmental organizations wrote an open letter on behalf of Wu, demanding that the government ensure an open and just trial. But soon after, government officials threatened to shut down the organizations' Web sites if they didn't remove the letter. They all complied.

While China's central government is modernizing and striving to establish the rule of law, freewheeling capitalism has swept across the countryside, fusing itself to lawless, autocratic traditions. The booming villages surrounding Lake Tai, near Shanghai and Nanjing, are in the most developed region of China. Far from Beijing's control, thousands of private factories built by farmers like Wu manufacture everything from toys to electronics to chemicals. Few have wastewater treatment systems, and even those factories that do often don't use them, to keep costs down.

Corruption and bribery are rampant. Decentralization has brought economic freedoms but few of the restraints—regulatory controls, protection of workers' rights, checks on local authority—considered important in the developed world. Speaking out against factory bosses carries real risks, but Wu didn't back down. "It is shameful that we can't drink water from the lake," Wu told the South China Morning Post last year. "The chemical factories and officials should be blamed. I want them to admit their responsibility so we will have clean drinking water again." Wu added that he was "both physically and mentally exhausted from fighting such a big group for so long."

The central government, on the other hand, realizes the enormity of the environmental problems caused by uncontrolled development and is starting to make amends. According to official statistics, some 70 percent of China's urban water supply is not fit for drinking or fishing; 30 percent of its river water is not fit even for agricultural or industrial use. In response, the government has passed a series of environmental laws, most recently requiring governmental agencies and factories alike to divulge waste disposal practices. Taking advantage of China's new freedoms, more than 2,800 environmental NGOs—mostly in the cities—are raising awareness of pollution, even challenging industrial projects: Activists succeeded in blocking a huge dam project on the Nu River that threatened to displace 50,000 indigenous people and destroy the habitat of some 80 rare and endangered species. "There has been a radicalization of the environmental movement," says Elizabeth Economy, author of The River Runs Black, about water pollution in China, and director of Asia studies at the Council on Foreign Relations in New York. "Now they are talking about issues of social justice."