For a country gripped by breakneck economic and social change, China remains remarkably conservative when it comes to political symbols and its own history. There is a good reason for this, of course – the continuing determination of the Communist party to retain monopoly control of politics (and the history that goes with it). So any slight change in the symbolism of the regime is bound to be scrutinised for meaning – never more so than when it involves the founder of the People's Republic.

Since 1999, the 50th anniversary of the Communist party taking power, the face of Mao Zedong has appeared on all Chinese banknotes. But this week, the central bank announced that it would be dropped from six million notes being issued for the Olympic Games in August.

Instead, they will show the new bird's nest national stadium on one side and, on the other, an ancient Greek marble statue of a discus-thrower, portraits of athletes and the numeral 2008.

This does not come entirely out of the blue. Some delegates to the national legislature suggested, two years ago, that other 20th century Chinese figures should be portrayed. The Olympics are also, clearly, a special occasion of which the current leadership is intent on making as much as possible. For that purpose, publicising the bird's nest has a logic of its own, as the Olympics are presented as a symbol of the changes in China since Mao's death in 1976.

But that certainly does not mean that China's leaders are ready to shunt Mao aside. From an economic and social viewpoint, he is anachronistic. But he still holds a potent place as the founder of a new dynasty; the single-minded ruler who, in the orthodox expression, enabled China to stand up again after a century of weakness and humiliation. If Andy Warhol turned him into a fashion icon, for China he is important as a symbol of national strength – however much he actually held his country back. A recent survey of Chinese corporate managers showed that many admired him for his ruthlessness.

Thirty-two years after his death, he remains core to the political system, which says a good deal about that system. The historic elements that the regime summons up to claim legitimacy – the Long March, the fight against Japan, victory in the civil war and the establishment of the People's Republic – are all indissolubly connected to him, however much mythmaking and propaganda have been used to distort reality. The tens of millions he killed, the failure and sheer lunacy of most of his major undertakings, as well as his destructive manipulation of the Communist party and its ideology, mean that he can no longer be regarded as a leader without fault. But the official verdict remains as propounded under Deng Xiaoping 30 years ago – he was 70% good. His face still looks out from the Forbidden City and crowds file past his embalmed corpse in a mausoleum by Tiananmen Square.

Those in power today remain intent on preserving the monopoly power of the Communist party rule that Mao succeeded in imposing in imperial fashion after 1949. That is the key to all they do, even if they are increasingly unable to control the economic process launched by Deng Xiaoping 30 years ago. Given the right opportunity, such as the Olympics, a slight shift may be possible on the periphery, as with this week's banknote announcement. But, until the regime is able to pose fundamental questions about itself, tampering with Mao will be too dangerous – however much Chinese realities contradict his intended legacy.