The day begins at 6.15am, as The East Is Red blasts through the speakers and echoes down the wide, empty streets, past the blazingly white statue of Chairman Mao, his right hand aloft in perpetual salute.

It ends at dusk with the closing refrain of another revolutionary classic: "The socialist society will surely succeed! A communist society will surely be achieved!"

Nanjiecun is as close as anywhere in China comes to fulfilling that pledge: a commune in a land that long ago embraced capitalism. Land is still farmed collectively. Its 10,000 inhabitants spend food tokens in public grocery stores. Inside the gates, the clatter and clamour of modern life vanishes; exhortations from the Great Helmsman replace advertising slogans. Each home, provided by the government, has the same furniture – down to its electronic Mao calendar.

As China celebrates the 120th anniversary of Mao Zedong's birth this week, Nanjiecun officials believe him as relevant as ever.

"Only Chairman Mao thought can lead to common wealth," explained Wang Hongbin, the party secretary. "Although he has left us, we hope his spirit is immortal."

At its height, Mao's influence was felt not only in Asia but across Africa and in the bourgeois west. In Paris, student radicals waved their Little Red Books. The British left was less enthused, but when police arrested a man and woman in London last month on suspicion of slavery, it emerged that the roots of the case lay in a Maoist sect founded in the 70s.

"There was great variety in what people read into Maoism," said Julia Lovell of Birkbeck, University of London, who is writing a book on its global legacy.

"Some saw him as the heir to Stalin; a doctrinaire Communist leader. Others ran with the idea of Mao as an anarchic democrat; as a guerrilla leader; as a man of the people but also a philosopher and poet. You have this strange contradiction: admiration for him as a proletarian, but also as a cultured intellectual."

At home in China, Mao's portrait hangs in Tiananmen Square and his face gazes from banknotes. His birthplace, Shaoshan, has spent 15.5bn yuan (£1.56bn) on tourism projects.

Since becoming leader in 2012, Xi Jinping has consciously embraced some Mao-style tactics, such as holding televised "criticism and self-criticism" sessions, for people to highlight others' faults, and confess their own. But he has also said anniversary celebrations should be simple and pragmatic. A TV series on Mao has been dropped and a birthday concert rebranded as a new year gala.

Officials celebrate an icon of national revival and Communist party rule, rather than the revolutionary whose thinking was described as a "spiritual atom bomb".

Yet his promise of economic equality has renewed appeal in a country beset by corruption, injustice and a gulf between rich and poor, as the popularity of Bo Xilai's quasi-Maoist platform proved before the Chongqing party secretary's downfall last year.

With its dated atmosphere, quiet streets, wholesome ethos and street-corner Tannoys, Nanjiecun is uncannily reminiscent of the 60s TV show The Prisoner: a staged, self-contained world out of place and time.

To Fan Jinggang, who manages Utopia, the Beijing bookstore known as a centre of modern Maoism, it is not an anomaly but an inspiration.

"If all villages in China took Nanjiecun's path, farmers' rights would be guaranteed and living standards would be higher than now," said Fan. "You would not see so many farmers exploited in cities. They would not be discriminated against … The rights of the proletariat would be guaranteed and the polarisation between rich and poor would not happen."

Many of the social ills he lists are also cited by the liberals he denigrates: environmental degradation, wasted resources, corruption, social discontent.

But his diagnosis is wholly different: "The transformation of the Communist party is the root of all problems in China," he said. "The rebels, to a large degree, have kidnapped the Communist party and the republic."

Current plans for reform suggest a further embrace of privatisation and marketisation, which he warned would intensify economic polarisation and social instability.

Fan points to the successes of Mao's reign: then, life expectancy soared from 35 to 68 years, workers were respected politically, and there were warmer relations between cadres and the people.

"History has proven that Chairman Mao's thought is the truth," he said.

But others remember him as the man whose leadership caused tens of millions of deaths in the Great Famine and the chaos and violence of the Cultural Revolution. When China embraced reforms after his death, hundreds of millions climbed out of poverty.

It is impossible to know how many in China share Fan's views, but it is probably true that their numbers are easily underestimated. Many are poor, often old, and they lack connections and influence.

Utopia's website was closed after Bo's purge, although a sister site still publishes leftist content. Fan complained that he could not share his opinions freely, blaming neoliberalism among officials and in the media, which does not run leftist opinions, and which attacks individuals and their point of view, he said.

Still, neo-Maoists are more tolerated by authorities than those calling for multiparty elections. And while they complain of being silenced, they are frequently intolerant of other views. When the prominent economist Mao Yushi criticised Mao Zedong as a "backstage orchestrator who wrecked the country and brought ruin to the people", leftists petitioned for his arrest and threatened the 84-year-old with violence.

Nanjiecun's officials avoid this brand of harsh ideological rhetoric: they are confident in their sedate course.

"Because it's common wealth, we don't have big disparities between rich and poor … Living and working here, you don't have pressure, because the group will help you solve problems," said the party secretary, Wang.

"When people work together and are optimistic and active, that's a good atmosphere. People talk and laugh together."

When Nanjiecun land was decollectivised, local farmers simply handed it back. Fields are now tended by a team and a grain ration given to residents. Officials and workers are paid but also enjoy free water and power, free meals in canteens, and free medical care.

Despite reports of significant debt in 2008, officials insist the town is prospering. Nanjiecun promises security in a world of casual employment, scant social welfare and soaring property prices – which is why young people who have ventured out to China's busiest cities often opt to return.

Government-run factories do, however, include a joint venture with a Japanese noodle-maker. In theory, there are no private shops, but the staff of a grocery store seem surprised to learn this. And though labourers from outside contribute according to ability, they do not receive according to their need.

"Everyone wants to live in Nanjiecun, but it's hard to qualify," said 21-year-old Xiao Li, who works as a guide to the village but lives elsewhere.

Much of the Mao memorabilia, such as the full-size replicas of his former homes in the botanical gardens, seems aimed primarily at tourists. His statue was erected in 1993 and the giant portraits around it – Marx, Engels, Lenin and Stalin – went up the following decade.

Qi Hongyao, a local, had brought a visiting friend to admire the figure. But he was perplexed by the idea that Nanjiecun might be a model for other places.

"In the past, people never went outside and didn't know what life outside was like. In the past, people just wanted warm clothes and enough food. Now they have more, so they want more," he said. "You can't go back."

Additional research by Cecily Huang