Communism is alive and well and living in Nanjie

Welcome to the village where everyone has a job for life and housing, holidays, electricity and food are free. The rest of China may have gone crazy for capitalism, but Nanjie has returned to the ideals of Chairman Mao and is making them work

By night, the towering, floodlit statue of Chairman Mao stands luminescent against the dark sky, the Great Helmsman surveying the Maoist bastion that is Nanjie village. While the rest of China has spent two decades hurtling towards untrammelled capitalism, this village in central Henan Province has decided that it prefers the old ways.

So Nanjie's 3,130 citizens have recollectivised the farmland and taken back village industries from private management. Under a collective welfare system, everyone has been given an identical apartment, fitted out with identical village-issued furniture, television set, telephone and cooker. No one now earns more than 250 yuan (pounds 19) a month, but everyone receives 14 free benefits which include schooling, health care, housing, electricity, life insurance, and a range of foodstuffs such as flour, eggs and oil.

Such privileges, however, are reduced should a family lose any stars under the 10-star good behaviour system, whose edicts embrace such Maoist principles as thrifty living, hygiene and selfless deeds.

Mao would be proud. According to village leaders, within the 0.7 square miles of Nanjie there is no crime, no unemployment, and no unplanned babies. Marriages are conducted in a group ceremony every 1 January; a communal canteen has been opened for village cadres, with plans to expand group eating; and free group holidays are organised for the best workers.

The Great Helmsman is everywhere. The village committee building banner reads "The Eternal Light of Mao Zedong Thought", everyone is issued with a book of Mao's key works, and all must attend weekly political study classes. Yang Rui, 31, director of the general office at the No 2 Noodle Factory, described a political class the previous Saturday: "We learnt Mao thought, and studied stories in the newspaper about people's good deeds. We were very sincere in this study, and afterwards carried out self-criticism."

Nanjie's 11,000 migrant workers, who staff the village's 26 enterprises, start and end their shifts with renditions of Mao's revolutionary songs, such as "The Great Helmsman Sailing on the Seas". The weekly Nanjie newspaper always prints next to its masthead a long quote from Mao, in red, of course. Even the village telephone directory has a photo of Mao on its cover.

So is this China's last bastion of leftism, backed by the remnant hardliners in Peking? Next month, China will celebrate the 20th anniversary of Deng Xiaoping's reforms, launched in 1978 with the crucial decision to hand back the land to the peasants and allow private enterprise.

Nanjie's behaviour, however, apparently conflicts with all the tenets of today's central government policy to scrap welfare benefits, privatise housing and divorce government from business enterprise.

Yet Nanjie's figures reflect a startling success: total production output rose from 700,000 yuan (pounds 54,000) in 1984, the year the recollectivisation started, to 210m yuan (pounds 16m) in 1992, and then to a staggering 1.57bn yuan (pounds 120m) in 1997, with the products of the factories ranging from colour-printing to beer. Agriculture now accounts for less than 1 per cent of production.

But China's Communist history is littered with examples of model villages that turned out to be fakes. So is Nanjie for real, or another fraud?

Early morning in Nanjie was quite an experience. The school gates opened at 5.35am for morning assembly, followed by a run, and an hour of pre- school self-study. In the dark, 12-year-old Luo Zhiqiang explained that a normal day would not finish until 8pm. How about Mao? "He's a good leader of our country. We should study his spirit well," the child trotted out by rote.

Guo Guizheng, the headmistress, said: "Since the whole country is already socialist, we are now building up the Communist community so that Nanjie may be the first in China to realise Communism."

By 6.20am, "The East is Red" was blaring from village speakers. The 150 mostly teenage village militia, back from their 5am run, were assembled for a quick revolutionary song before breakfast and road-sweeping duty. Unity is strength, they chorused. By 7.30am, over at the No 2 Instant Noodle Factory, the night shift was knocking off work and lining up for their morning drill. Tang Xiaoli, a 19-year-old migrant worker, said: "In most cases, when the machines stop, we have political study. But I like working here; the food and housing are all very good." Then she ran off to join her colleagues in a rendition of "Socialism is good, socialist people are of high consciousness". Nanjie is now China's biggest instant noodle base, producing 380 tonnes a day.

Wang Hongbin, 48, is the man behind it all. Referred to as ban zhang (head of the class) by villagers, he has been Nanjie's Communist party secretary since 1977. He also earns 250 yuan a month, and said he had no bank savings. "Only by serving the Communist Party and people well could I repay the party for its kindness."

Mr Wang was in charge when the Mao communes were dismantled after 1978, and the land and enterprises were contracted to individual peasants. The official line is that the reforms were not a success. Many farmers deserted their land, and at the flour and brick plants the new bosses got richer but the workers did not.

So, from 1984, the enterprises were taken back into village management, and from 1986 the land was recollectivised. Yang Hua, 32, director of accounting at the No 2 Instant Noodle Factory, said: "From then on we have advocated to follow the socialist road and get rich collectively."

Nanjie's private stalls and restaurants, all run by outsiders, are contained within a specified area, and mostly serve visitors and migrant workers. Mr Wang explained: "Our slogan is for Nanjie people to be rich, but without a cent in savings." The statue of Mao went up in 1993.

Is this Maoist hell or heaven? Entering Nanjie feels rather like stepping on to a film set. Leaving behind the chaos and squalor of normal rural China, you wander down a 400-metre covered walkway between the newly built school and the white-tiled apartment blocks. The empty streets are spotless, lined with rubbish bins, trees, flowers and landscaped gardens. In the self-styled Land of Purity, there are no karaoke bars.

In private conversations with villagers and migrant workers, it is clear that to a Chinese peasant, hot running water in a modern bathroom is worth several hours of political claptrap. All expressed admiration for Mr Wang, and outsiders said they wished they too could be Nanjie villagers.

An Hongxia, 25, was born in Nanjie but five years ago married out, to a man from a nearby village. She now runs a private restaurant in the adjacent county town. "I would like to return to Nanjie, but I cannot," she said. "The living conditions are better there. There is no extra worry for you, since everything is supplied. There are some shortcomings over there, some lack of freedom and strict discipline. But everybody wants to go back."

These days, unlike in the past, there is no shortage of girls keen to marry into Nanjie. But such brides must make the grade. Sheng Ganyu, head of publicity for Nanjie, said: "Before a marriage, we send a group of people to conduct a survey of conditions on the girl's side, her education and work performance, to make sure she is a good girl."

Nanjie is certainly no ordinary village.

However, on closer examination, a curious brand of modern-day feudalism is seen to be at work. There are 3,130 Nanjie citizens who qualify for the welfare benefits, of whom about half are of working age. Add to that the 250 or

so technically skilled honorary citizens who have been recruited at salaries up to 10 times the villagers' maximum.

But the workhorses of Nanjie's collectivised economic miracle are the 11,000 low-paid factory workers, mostly from other Henan villages. They are glad of the jobs, but wages are meagre and, apart from free basic food and lodging, they do not qualify for welfare benefits. The girls at the noodle factory are paid just pounds 10 a month, with no security of employment if Nanjie's sky-high growth rate falters, as it has this year amid the regional economic crisis.

Nanjie also gets an unnatural boost from the extraordinary number of visitors who come to marvel - up to 250,000 each year. They snap up Mao badges and busts, plus an array of books and videos on the Nanjie experience. Yang Yuchao, 25, from a Peking factory making machines for the coal industry, said he had come to see the Nanjie spirit. "It is very sincere, very simple. I saw the lady in charge of cleaning work... she was very conscientious."

We have to hope that the leaders are as conscientious as they claim.

The net profits of Nanjie's enterprises are paid into a collective account, which Mr Wang said now stood at 600m yuan (pounds 46m). This compares with the annual spending of 4m yuan on citizens' welfare - less than pounds 100 a year per person, despite the low cap on wages.

There are strict rules to prevent corruption, with the party asking everyone to handle correctly any discounts, gifts and favours. Nanjie's upstanding citizens have handed in more than 1,000 gifts in recent years, worth a total of 588,000 yuan (pounds 45,000).

It remains a puzzle who is backing Nanjie politically. Mr Wang gave precisely worded answers to all political questions, knowing that he could land himself in hot water. He rejected the suggestion that the Deng reforms were wrong for Nanjie, and he did not preach that other villages should copy his model. So was he being used by leftists?

People holding such a view do not understand Nanjie's situation, said Mr Wang. But those with links to Peking's remaining hardliners have written articles praising Nanjie.

Collectivism was a disaster for Nanjie and for China when Mao was alive, so Nanjie's orthodoxy is characterised as wai yuan, nei fang (circle outside, square inside). The circle represents the flexibility of the market economy; the square is the strict Maoist disciplining of the people. It suits both sides to stress publicly that the village's economic successes could not exist without the Deng reforms.

The goodbye present from Nanjie to The Independent hedged its bets with a gilded Mao lapel badge in a box with two slogans: "Mao Thought wins over God", and "Mao is human, not God".