Imagine if surrealist artworks were coming to monstrous life and roaming the streets of occupied Paris during an alternative-history 1950 in which the second world war was still going and the Nazis were desperately trying to raise demons from hell. Actually you don’t need to, because China Miéville has. And this is a writer, his admirers have long known, from whom one should expect anything except the ordinary.

The narrative proceeds along two timelines. In war- and art-torn 1950 Paris, a young man named Thibaut wanders groggily in the wake of the defeat of his comrades, part of a faction of the resistance loyal to surrealism. Meanwhile, in 1941 Marseille, Jack Parsons, a young American and adept of Aleister Crowley, hangs out with André Breton and other surrealists, hoping to capture their imaginative magic in an electric box and travel to Prague in order to raise a golem with it to defeat the Reich. Unfortunately, as you may surmise, something goes wrong with that plan.

The bestiary of surrealist “manifs”, or manifestations, that Miéville parades before us is dazzling. In the Seine there are sharks with canoe-seats for backs. There are wolf-tables, and a giant baby’s face emerging from the ground. The top half of the Eiffel tower hangs suspended in the sky, the bottom half having disappeared. And central to the story is a living version of the “Exquisite Corpse” by André Breton, Jacqueline Lamba and Yves Tanguy: half human, half mechanical jumble, with an old man’s head crowned by a caterpillar and leaf – as the narrator puts it, “hedgerow chic”.

The novella comes with an extensive set of notes at the back detailing the sources for all these visions in surrealist art and writing, as well as a pleasantly traditional afterword in which the author claims to have heard the story first hand from its surviving hero. At the same time, in New Paris itself, everyone is furiously consulting art history textbooks and obscure religious texts, which have proven critical weapons of information warfare even if, as many grumble, they aren’t true. Since the surrealist outbreak, the narrator observes, “curators have been Virgils. Their monographs and catalogues now almanacs.”

It is quite a feat to narrate all this in a terse, naturalistic style that is neither overtly silly nor po-faced. The prose reserves its right to outbreaks of sly wit: “Flocks of bat-winged businessmen and ladies in outdated coats shout endless monologues of special offers and clog planes’ propellers with their own questionable meat.” For all its hypnagogic gusto, the text does arguably overuse the word “thing”, as the initial placeholder noun for some new apparition, as well as the “wails” of victims, but overall the effect is exhilaratingly precise and serious, as though Albert Camus had rewritten Raiders of the Lost Ark.

What there isn’t much of is dramatic suspense, since, when things get hairy, the characters reveal hitherto unsuspected magical powers. Thibaut is wearing bulletproof pyjamas, and a woman he teams up with, Sam, can summon a destructive wind. Seemingly alone among the denizens of the ruined and anarchic city, they are untouchable flaneurs, insouciant superheroes. This helps give the novel the quality of a dreamlike tour through a gallimaufry of riotous imaginings, or a world-building prologue to future tales set in this alt-history New Paris, as the notes imply might be forthcoming.

There is, however, a quest, as our heroes learn of a secret German initiative codenamed Fall Rot (“Case Red”), some kind of weapon or monster with which they hope to defeat the manifs. At the story’s climax it turns out to be satisfyingly horrible, but not as bad as what follows – a brilliantly eerie apparition that it would be invidious to reveal here.

In French, the term “manifestation” as well as the shortening “manif” are used for protests and marches, and this novel is also an allegory about the relative political potency of true art and kitsch. Of course a lobster telephone won’t by itself defeat fascism, but the author and the reader are well aware by the book’s end of how this intense, scholarly fantasy speaks to our age as well.

• The Last Days of New Paris is published by Picador. To order a copy for £11.24 (RRP £14.99) go to bookshop.theguardian.com or call 0330 333 6846. Free UK p&p over £10, online orders only. Phone orders min p&p of £1.99.