Kai Strittmatter is a German journalist who writes for Süddeutsche Zeitung and is currently based in Copenhagen. From 1997 until recently, he had been a foreign correspondent in Beijing. Prior to those postings, he had studied sinology and journalism in Munich, Xi’an and Taipei. So he knows China rather well. Having read his remarkable book, it’s reasonable to assume that he will not be passing through any Chinese airport in the foreseeable future. Doing so would not be good for his health, not to mention his freedom.

We Have Been Harmonised is the most accessible and best informed account we have had to date of China’s transition from what scholars such as Rebecca MacKinnon used to call “networked authoritarianism” to what is now a form of networked totalitarianism. The difference is not merely semantic. An authoritarian regime is relatively limited in its objectives: there may be elections, but they are generally carefully managed; individual freedoms are subordinate to the state; there is no constitutional accountability and no rule of law in any meaningful sense.

Totalitarianism, in contrast, prohibits opposition parties, restricts opposition to the state and exercises an extremely high degree of control over public and private life. As the historian Robert Conquest put it, a totalitarian state recognises no limits to its authority in any sphere of public or private life and seeks to extend that authority to whatever lengths it can.

Which pretty well matches Strittmatter’s portrayal of contemporary China under Xi Jinping, its new “leader for life”, who is increasingly looking like Mao 2.0 right down to his Little Red App as the contemporary version of his predecessor’s Little Red Book. Mercifully, though, he does not seem to have Mao’s enthusiasm for sacrificing millions of people on the altar of socialist rectitude. But, as Strittmatter tells it, under Xi’s leadership the Communist party of China (CCP) has been closely following the totalitarian playbook as described by Hannah Arendt and other observers of the phenomenon.

The more one reads, the more pressing one conclusion becomes: almost everything we thought we knew about China is wrong

The first stage is to disconnect citizen/subjects from truth and reality. For this, it’s necessary – as George Orwell noted in Politics and the English Language – to invent a new language by appropriating the existing vernacular so that words cease to have their original meanings and take on interpretations more congenial to the state. The prime objective at this stage is not so much to deceive as to intimidate potential critics or opponents, such as journalists (purveyors of “fake news”) and judges (“enemies of the people”).

Having hijacked language and legitimised lies, the next stage is to sow confusion. “If everybody always lies to you,” Arendt once said, “the consequence is not that you believe the lies, but rather that nobody believes anything any longer.” With such a people, she added, “you can then do what you please”. This is made easier by deploying the coercive power of the state to eliminate dissent. In Xi’s China this is largely done by using the law – which only applies to the subject, not the state. In the old days this used to involve show trials; nowadays they are supplemented by televised “confessions”.

Strittmatter quotes a prize example from the humiliated CEO of Toutiao, the biggest news aggregator in the world. “Since receiving the notice yesterday from regulatory authorities,” the poor wretch bleats, “I have been filled with remorse and guilt, entirely unable to sleep. I profoundly reflect on the fact that a deep-level cause of the problems in my company is a weak understanding and implementation of the four consciousnesses of Xi Jinping.”

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Another requirement of totalitarians is the fostering of collective amnesia. The CCP seems to have been remarkably successful at this – which is why the recent anniversary of the Tiananmen massacre went entirely unmarked in China and why disasters that happened on the party’s watch are systematically erased from the public record.

All of this and much more is energetically related by Strittmatter. The more one reads, the more pressing one conclusion becomes: almost everything we thought we knew about contemporary China is wrong. And this has happened because the lenses through which we viewed this emerging superpower were distorted by arrogance, naivety, complacency, commercial greed and wishful thinking.

We thought that if the Chinese wanted to modernise, they would have to have capitalism. And if they had capitalism, they would have to have democracy. And if they wanted to have the internet (and they did), they would have to have openness, which would eventually lead to democracy.

All of which turned out to be baloney. Essentially, the CCP decided that they could have their cake and eat it – and they have succeeded. They have embraced digital technology and used its intrinsic affordance of comprehensive surveillance to construct a successful, powerful, growing, networked totalitarian state with global ambitions.

Does this matter? You bet it does. From 1946 to 1989, we lived in a bipolar world with two alternative systems – ours and the Soviet Union’s – locked in a cold war. Then the USSR imploded and we briefly had a world dominated by a single hyperpower free to make its own gigantic mistakes with impunity. But China’s modernisation means that bipolarity has returned and a formidable alternative to our system has materialised. Yet we remain obsessed with Russia – which is a nuisance rather than an existential threat – and not with China. We prostrate ourselves before the country’s new emperor while continuing to fight the last cold war. If nothing else, this book should give us pause for thought.

• We Have Been Harmonised: Life in China’s Surveillance State by Kai Strittmatter is published by Old Street Publishing (£9.99). To order a copy go to guardianbookshop.com or call 0330 333 6846. Free UK p&p over £15, online orders only. Phone orders min p&p of £1.99