The spectre of Mao still haunts the rust belt of northeast China, where the old Maoist slogans of solidarity float over a deindustrialising landscape, its population suffering both despair and barely suppressed rage. This blighted region is the birthplace of film-maker Sun Xun, who grew up here during the 1980s.

The creator of incisive animation films that encompass the rich contradictions of the new China, Sun — born in 1980 — has become a rising star among the country’s third-wave artists, the post-millennial generation that draws its inspiration simultaneously from a globalised identity and from a suspicion of what lies beneath that gleaming cosmopolitanism.

Sun can now count 18 films to his name, all of which blur the boundaries between animation and performance, woven through with fat charcoal strokes and lilting shadow puppetry. In 2005’s Lie of Magician, Sun presented his naked body as a sketchbook, populated with shifting ink rhythms and the bare motifs of the Chinese landscape painting tradition: animals, clouds and rain. By 2010’s 21KE (21 Grams), Sun was imagining China through the hazy lens of 19th-century western capitalism, roofed by a sky of steampunk flying machines.

Along with installation artist Cao Fei, Sun has been at the forefront of the Chinese avant-garde’s powerful turn to animation. But he also represents a distinct strand within this. While his animation peers have embraced the language of computer games and social media to construct China as a tech dystopia — notably in Cao Fei’s RMB City, developed within the virtual world of Second Life — Sun’s alternative visions of Chinese modernity still use more traditional artistic tools. These handcrafted animations are the subject of the Manchester Centre for Chinese Contemporary Art’s Stately Shadows exhibition.

Stately Shadows pulls together four of Sun’s earliest works, made shortly after he graduated from the China Academy of Art. These pieces have made way for other contemplations on the duplicitous narratives of Chinese history, represented here by two recent animations that stand at the exhibition’s core: a red-blue 3D screening of 2013’s stop-motion Magician Party and Dead Crow. Human puppeteers mingle with animated creatures, as Sun’s studio is set in motion. The artist’s assistants weave between zeppelins and flying fish, assembling around a colossal peacock puppet.

Next week, in celebration of the Chinese new year, his 2014 film What Happened in the Year of the Dragon will be projected across the side of Manchester’s St Ann’s Church. A dreamscape brimming with incandescent fireballs and skull forests, it shows two dragons uncoiling and snarling at each other, a mirror of the power struggles within the Chinese political elite.

Sun’s woodcut prints bring to mind the harsh contours of early 20th-century political propaganda, while his ink-wash traces the mannerisms of classical Chinese painting. He stretches his cerebral collages, in which images ripped out of old biology textbooks jostle against communist newspapers, across crumpled rice paper.

As the capitalist turn of the 1980s did violence to cityscapes elsewhere in China, Sun’s home town of Fuxin still marched to the beat of another age. The party voice continued to be piped in through public loudspeakers, the soundtrack to the steady closures of the state-controlled factories. Stately Shadows hosts Sun’s 2008 film Coal Spell, in which an old Rmb5 banknote emblazoned with a portrait of a coal plant inspires the artist to pick his way through the disintegration of industrial Fuxin as fumes threaten to blot out the sky.

Such themes — redundant labour; displacement — constantly recur in China’s independent documentary movement, stemming from that epic 2003 trilogy West of the Tracks, in which Wang Bing recorded the obliteration of working-class identity and the ruin of the socialist dream in China’s northeast, filmed between 1999 and 2001.

Sun Xun’s mistrust of accepted narratives dates from his childhood. After a day of schooling in official Chinese history, he would sit and listen to his father recount the public humiliation that his grandmother faced during the Cultural Revolution. As a teenager, Sun ferociously absorbed the writings of Aldous Huxley and George Orwell. At the age of 15, when he moved to Hangzhou to study calligraphy and brush painting, he had to come to terms with an ideological divide. “Everyone where I grew up, including my parents, worked in a factory and thought that people in business were evil capitalists,” he recalls. “But in Hangzhou, everyone was doing business.”

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Sun’s work rejects the commerce of Japanese anime production and western Disneyfication

Stately Shadows surveys how Sun reorientated himself within the muddled temporalities of China’s socialist neoliberalism. He repeatedly and obsessively explores ruined memories and corrupted histories in animations drenched with the flickering nightmares and collective amnesia of today’s China. His favoured motifs, glimpsed between the pages of old party propaganda or the ravaged characters of classical calligraphy, include bloodsucking mosquitoes, screeching owls and a top-hatted magician — a figure the artist describes as “the only legal liar”.

In 2006’s Shock of Time, the faceless magician dances across sequences of industrial machinery and cuttings from 1950s newspapers. In Requiem, made the following year, the magician madly gesticulates into multiple microphones, eventually straddling the globe as a political colossus.

In many ways, Sun’s career embodies the ambitious reach of his generation, so attuned to the international art scene. Thirty assistants work and sleep in his vast studio, creating the labour-intensive animations. At the same time, Sun tries to sidestep the full speculative fever of the market. He rejects the commerce of Japanese anime production and western Disneyfication, instead choosing to exhibit at film festivals. Although his films have been sold in limited editions, he also experiments with ideas of regeneration and reincarnation. Many of his exhibitions feature temporary wall paintings, which are then erased at the end of their run.

Discrepancies between memory and history are by no means unique to China but, in China, their long shadows are unusually disturbed and disturbing. Taken as a body of work, Sun’s films are a vital testament to the special chaos of the collapse of Chinese communism.

Three of Sun Xun’s films will be projected on to St Ann’s Church, Manchester, February 19-21; ‘Stately Shadows’ runs to March 22, cfcca.org.uk

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