About a kilometre west of Tiananmen Square and the compound housing China's top leaders in central Beijing stands a large unmarked building. No sign hangs at the entrance to indicate the business conducted inside. The occupant's phone number is unlisted; calls from the building do not display an incoming number identifying their origin, just a string of zeros.

As the Communist party on Thursday marks 60 years in power, however, the occupants of the office complex will be quietly celebrating as well. Little known even within China, the body based there and known as Zhongzubu – the Central Organisation Department – has emerged from the country's economic upheaval of the past three decades as indispensable to the party's hold on power.

China's embrace of the market since the late 1970s has driven a surge in economic growth and a social revolution. Chinese citizens are in many respects freer and richer than they ever have been under communism, able to work where they want, travel overseas and buy homes and cars. But while easing controls over aspects of the economy and society, the party has worked to ensure it maintains its grip on other levers of power.

The party still directly controls the armed forces and the media. The Central Organisation Department is its third and least-known pillar of power and the key to its hold over personnel throughout every level of government and industry. Far from undermining the department's position, the freedoms unleashed by the market economy have made personnel control more essential than ever in fending off rivals for power. The ability to vet government staff for their loyalty to the leadership, senior officials believe, is also essential to the party's grip on power into the future.

The department has been headed since late 2007 by Li Yuanchao, one of the more open-minded figures of the new generation of Chinese leaders. Mr Li studied briefly at the Kennedy School of Government at Harvard University and has been at the forefront of moves to cultivate ideas to modernise the party. His day-to-day duties at the department, however, are decidedly old-fashioned.

The department replicates what was known in the Soviet Union as the nomenklatura, the “list of names” of party members who formed the Communist ruling class through their eligibility to fill prized jobs in any sectors the state controlled. “The system is all from the Soviet Union but the CCP has taken it to an extreme,” says Yuan Weishi, of Sun Yat-sen University in Guangdong. “China is more radical. [The party here] wants to lead everything.”

To glean a sense of the dimensions of the organisation department's job, conjure up a parallel body in Washington. The imaginary department would oversee the appointments of US state governors and their deputies; the mayors of big cities; heads of federal regulatory agencies; the chief executives of General Electric, ExxonMobil, Walmart and 50-odd of the remaining largest companies; justices on the Supreme Court; the editors of The New York Times, The Wall Street Journal and The Washington Post, the bosses of the television networks and cable stations, the presidents of Yale and Harvard and other big universities and the heads of think-tanks such as the Brookings Institution and the Heritage Foundation.

All equivalent positions in China are filled by people appointed by the party through the organisation department. With a few largely symbolic exceptions, the people who fill these jobs are also party members. Not only that, the vetting process takes place behind closed doors and appointments are announced without any explanation about why they have been made. When the department knocks back candidates for promotion, it does so in secret as well.