Five goose-stepping guards emerge into Tiananmen Square every morning, raise the Chinese flag and salute it crisply. The huge banner flutters all day at Beijing's historic heart, as it has ever since Mao Zedong raised it first on 1 October 1949. "A new China is born with the sunrise," Mao said in his speech that day proclaiming the communist victory as the flag was raised.

Nearly 60 years later, the flag is still there, so is a giant portrait of Mao that gets a face-lift every now and then. Mao's mausoleum has become more of a tourist destination than a pilgrimage site. Mao's legacy in the land of his revolution today is a Mickey Mouse world of Mao kitsch: alarm clocks with little arm-waving Maos, Mao key chains, Mao T-shirts and restaurants that have trendy Red Guard themes. 'Maorabilia' is everywhere but there is hardly a trace of Maoism in the land of Mao Zedong.

"The only thing still remaining of Mao is that flag on Tiananmen Square," admits a Chinese colleague who is not too curious about the resurrection of their prophet in Nepal. There is a reluctance among officials here to talk about revolutionaries taking their name from China's liberator just as they don't want to talk about the excesses of the Great Cultural Revolution of 1966-76.

Most of the journalists and ordinary citizens we met either didn't know about the rise of Maoism in their neighbouring country or if they did, they tended to dismiss it. Narendra Raj Pandey was a royal palace employee before he was appointed the Nepali ambassador in Beijing two years ago. He says, "The Chinese government's view is that Nepali Maoists have misused the name of their leader."

We asked several other government officials about the Chinese attitude and they said they didn't really know about the Maoists in Nepal. Zheng Jingxiang, deputy chief editor of Beijing Daily summed up this attitude, "I was a baby when Mao was alive, and I know even less about Maoists in Nepal."

China is dashing headlong into the future, no one has much time to dwell on an awkward past. The process of modernisation has accelerated with breakneck preparations for the 2008 Beijing Olympics. Mao-era bicycle lanes along Beijing's main boulevards have given way to streets widened to accommodate Beijing's 2.6 million cars, a new airport is under construction, superhighways and levitation trains are snaking across the countryside.

In Shanghai, the talk is no more about "overtaking Hong Kong", it is about having the biggest, the highest, the widest and the first of everything. Suburbs that were paddy fields till 12 years ago have turned into an urban jungle of skyscrapers. With names like the World Business Centre and the Oriental Pearl Tower, these soaring structures symbolise not just China's achievements but also its confidence in the future.

But China is still a one-party state and freedoms are curtailed. It may be called 'socialist market economy' but a more laissez faire capitalist economic system would be hard to find anywhere. Still, organised politics is not allowed and officials tell us that this is still necessary to ensure the discipline and single-mindedness needed for economic growth.

Even here, there are signs of loosening up. As long as it helps create jobs and spurs growth, the government is willing to take on non-communists. Compared to a decade ago, there is much more freedom to bring out environmental issues to address the ecological damage caused by a headlong rush to expand the economy. "Till recently, we could only say and do what the government told us to, today people are free to bring up demands," says an environmental journalist.

Ironically, 30 years after Mao's death, his communist party is still engaged in winning the hearts and minds of the peasantry. The government is trying to address the concerns of farmers and workers in the hinterland who have been left out by the growth zone along the eastern seaboard with subsidised housing, cash benefits and health care. Social discontent is a concern because many have been left behind by uneven growth and the issue was addressed during this month's Chinese People's Congress.

"There is hardly any policy left over from the Mao era," journalist Li Bingxin told us, "Maoism is now a part of China's history. Comrade Mao is a great historical leader and we respect him." That seems to be the official line.

It doesn't matter if the cat is black or white

The history of Mao's Great Cultural Revolution from 1966-1976 is replete with parallels with the 'Historic Leap' of the Nepali Maoists. The purges, mass deportations, trials in kangaroo courts and paranoia of the time were triggered by a power struggle within the hierarchy centred around Mao's fourth wife, Jiang Qing.

Ideologically, the purges were justified to hasten the completion of Mao's revolutionary goals with the slogan: 'power to the proletariat'. But by the time Mao died in 1976 and the Gang of Four was finally pushed out, between 2-7 million Chinese had been killed and a staggering 20 million are estimated to have died during the Great Leap Forward. Even today, there are hundreds of millions of Chinese who lived through what they still call 'the black period'.

Anyone who was suspected of not being loyal to the new party line was publicly humiliated, thrown out, exiled to the countryside or executed. Even those who were seen as future rivals to the hierarchy were eliminated. One of the aims of the Cultural Revolution was to uproot and boycott 'bourgeois' education. Students were encouraged to expose their teachers and in many cases even kill them through lynch mobs. Temples and monasteries were destroyed, monks and priests killed or disrobed.

After Mao's death in 1976 and the defeat of the Gang of Four, Den Xiaoping rolled back on strict communisation, restored private property and allowed farmers to grow and sell produce for profit. His dictum: "It doesn't matter whether a cat is black or white as long as it catches mice" became the mantra for the post-revolutionary era of prosperity and growth.