On the evening the Nobel Prize committee crowned magical-realist novelist Mo Yan as the first laureate living in China (outside a prison), Alice Xin Liu, managing editor of Pathlight, a new magazine of Chinese literature translated into English, was downing homemade ale at Vine Leaf, a Beijing bar. Her smartphone lit up with ecstatic text messages. “But I wasn’t really surprised,” she said. “Mo Yan’s name had been floated for a while...