As China marks the 70th anniversary of the founding of the communist People’s Republic on Tuesday, Beijing will showcase its growing wealth, technological prowess, military might and diplomatic clout with a parade of goose-stepping troops, gaudy floats and nuclear-capable missiles. Certainly, Beijing’s communist rulers have much to celebrate. In the past few centuries the country has never looked as strong as it does today, a consequence of the four-decade economic boom ushered in by the late leader Deng Xiaoping’s free market reforms and opening-up policy. In those 40 years, China has witnessed something of an economic miracle . Growing annually at an average of 9.5 per cent, its GDP went from 367.9 billion yuan in 1978 to 90 trillion yuan (US$13.18 trillion) last year. Meanwhile, per capita GDP rose from just US$200 in 1979 – when 80 per cent of Chinese lived in absolute poverty in rural areas – to around US$10,000 last year, firmly in middle-income territory. At the end of 2010, China overtook Japan as the world’s second-biggest economy and by 2017 had risen to 75th in the world in terms of per capita GDP, according to the United Nations. Life expectancy, too, has risen: from 66 years in 1979 to 76 in 2016. In fact, in some economic areas – such as exports, foreign reserves, mobile phone and internet usage and car sales – China now tops the world. In the past decade, it has become the chief engine of global growth. China’s praise for Xi Jinping on National Day will say much about his power Throughout this period, its rising wealth has grown its presence and influence overseas, enabling it to fund programmes and infrastructure projects across the developing world, from Asia to Africa and Latin America. A DEVELOPING GIANT There’s no doubt; China’s economic influence is massive. Nevertheless, China is still neither an advanced nor a developed country. Nor can it properly be described as a rich nation. It is a developing giant on the world stage. Just look at per capita income, arguably the best measure of a country’s personal wealth and its people’s standard of living. At US$10,000, China still lags last year’s worldwide average of US$11,570. And it is far behind the US$62,641 of the United States and the US$48,610 average for advanced economies, to quote International Monetary Fund figures. Clearly, some of the world’s largest economies – China and India – have much to learn from some of its smaller ones, like Luxembourg and Switzerland. This fact is part of a wider truth about China that is sometimes lost in all the hype about its rise. Yes, it has risen to new heights in many areas and become a globally influential power in the past 10 years. But it is still not a true superpower, even if it is emerging as a strong contender to become one. To be a true superpower, a country must wield global influence in many, varied spheres: in economics, in science and technology, in military matters and in soft power. Xi’s speech shows Communist Party is still haunted by the fall of the Soviet Union China might score an A on its end-of-term report for economics, given that it is the world’s second-largest economy, its largest manufacturing hub and a leading exporter of mechanised goods. And it probably even manages a B for its military might. The People’s Liberation Army (PLA) is, after all, the world’s largest serviced army. Even so, there’s room for improvement. Its uncontested and corruption-tarnished forces are still far inferior to those of the US , the world’s only truly global military power, according to the World Economic Forum. The PLA can only look on enviably at the American navy’s near invincibility and ability to exert and project power anywhere in the world – a privilege it has enjoyed unrivalled since the end of World War II. But in other subjects, including science and technology, China’s report card is less impressive. Despite its swift rise in telecommunications, new energy and artificial intelligence over the past decade, it still has much to learn from the developed West in the traditional sciences, academic research and education. Just take a look at the history of the Nobel Prize since it was first handed out in 1901. Since then, Europeans have won 481 Nobel Prizes; Americans, 375. Within Europe, Britain has won 133; Germany, 108; while even smaller Western nations like Switzerland, Sweden, Austria and the Netherlands have earned between 20 and 30 each. To date, China has just three Nobel Prizes; one for science, one for literature and one for peace (the last of which was awarded against Beijing’s will). This explains why Miao Yu, China’s former minister of science and technology, rates China’s scientific research as “fourth tier”, lagging the US in the first tier; Japan, Germany, Britain and France in the second; and other developed nations, such as Canada, Italy, Australia and Israel, in the third. All these weaknesses must be addressed if China is to reach the status of developed country, or advanced economy. And it must reach this status if it is to earn the respect of the world, something it so craves. GOING SOFT This brings us to another of China’s struggles: soft power . While traditional power and influence can come through threats and coercion, soft power is about how countries leverage their international image to earn the respect and support of other countries. China has yet to fully grasp this fact. Consequently, it suffers a relative lack of popularity abroad. When we say ‘new order’ of the Communist Party, what are we talking about? While surveys by the Pew Research Centre have found African countries to have generally positive views of China, with four countries surveyed last year returning an average favourability rating of 62 per cent, perceptions of China in the US and across Europe are generally negative, with more than eight in 10 Europeans believing that China doesn’t protect the personal freedoms of its own people. Perhaps more surprisingly, even polls in three Latin American countries – Brazil, Mexico and Argentina – suggested negative views of China. These views are in stark contrast to views of Japan, the most respected country in Asia. There are a host of other areas, such as the environment, in which China ranks either low or very low. For instance, since 2012, the International Energy Agency has ranked China as the world’s largest emitter of carbon dioxide. And, on various global indices, China ranks 72nd for globalisation; 79th for corruption; 87th for gender equality; 90th in human development; 100th in life expectancy; 110th in economic freedom; and 133rd in the environment and sustainability. It ranks even lower in areas related to politics and human rights. For instance, China was 135th out of 162 countries in the 2018 Human Freedom Index, compiled by the Washington-based CATO Institute; 177th out of 180 in the Press Freedom Index compiled by Paris-based Reporters Without Borders; and was rock bottom for the third consecutive year for internet freedom, according to New York-based Freedom House in 2017. This suggests outcries over China’s human rights record have often been drowned out by the cheers for its economic miracle. CHALLENGES AHEAD While China has made great strides in the past four decades, its leaders are more nervous now than ever about their grip on power and international standing. The country’s most daunting challenges, internally and externally, lie ahead. The economy has lost momentum over the past decade as its growth rate has steadily dropped. It was 14.23 per cent in 2007; 9.5 per cent in 2011; 7.3 per cent in 2014; and 6.6 per cent last year. That downward trend has accelerated quarter by quarter since last year and the latest figures suggest this will continue. The 6.2 per cent growth of the April-June period was the lowest quarterly figure since records began in March 1992. China has a lot to celebrate in 2019, but it also has old wounds to heal China’s economic woes are not exclusively about growth figures, but also about the future of its model of state-led capitalism. Despite its claims to be a socialist nation, China has yawning social contradictions and one of the world’s biggest wealth gaps. In 1980, the richest 1 per cent of people owned 6.4 per cent of the country’s wealth; in 2015, that figure was 13.9 per cent. In 1980, the poorest half of the population held 26.7 per cent of the wealth; now they hold just 14.8 per cent. In politics, the country has become more divided than at any time in recent memory. Not since the death of Mao has China seemed this ideologically driven. Orthodox Marxism and Maoist policies have been revived and many Chinese feel the country is moving inexorably towards greater authoritarianism. Within the establishment and among intellectuals, there is widespread disapproval of the Mao-style personality cult surrounding President Xi Jinping , his excessive accumulation of power and the controversial constitutional amendment entitling him to lifelong rule. Since that amendment, China’s political future has become more uncertain. At issue is not only how long Xi will stay in office, but also what happens after Xi and his era of strongman politics. What sort of power succession will there be, and what direction is China going in the longer term? HONG KONG AND BEYOND China’s rise comes amid an increasingly hostile international environment – one that has been stirred up by Beijing’s high-profile displays of its rising might and power abroad. Mass protests in Hong Kong ; rising pro-independence sentiment in Taiwan ; the escalating rivalry and trade war between China and the US: each of these issues threatens to derail China’s development. For more than three months, protests against an extradition bill in Hong Kong that would have allowed for suspects to be sent to mainland China have evolved into a wider movement in which many elements are opposing the central government’s control over the former British colony. The continuing unrest and frequent violence have plunged the city into the worst political and constitutional crisis since the British handed sovereignty back to China in 1997. National Day fireworks cancelled amid Hong Kong protests Over in Taiwan , cross-strait relations have plunged to a historic low since the Democratic Progressive Party’s Tsai Ing-wen , who is seen as favouring independence for the self-governed island, came to office in 2016. Beijing views Taiwan as a wayward province that must be reunited with the mainland at any cost – even through force, if necessary. Tensions are rising ahead of the island’s presidential elections in January. A 2018 survey by the Cross-Strait Policy Association found that nearly 80 per cent of Taiwanese felt mainland China was “unfriendly towards Taiwan”, suggesting Tsai’s stance on ties with the mainland may be a vote winner. At the same time, Beijing’s relations with the West – in particular, with Washington – are at their lowest ebb. A full-blown tariff war looms amid escalating rivalry and confrontation between the world’s sole superpower and a fast-rising pretender to its throne. Xi, keen to revive China’s national greatness, has swapped Deng’s low-key diplomacy for an increasingly high-profile posture that many analysts believe has contributed to the growing US-China competition for leadership on the regional and global levels. Many analysts even warn that the world’s two largest economies and chief political adversaries are in fact in the early stages of a new cold war . Critics say the party’s inflated propaganda about Chinese achievements on the world stage has contributed to this increasingly hostile environment by raising suspicions of its motives. Beijing’s increasing hawkish rhetoric and assertive defence policy have rekindled distrust not only in the West, but also among China’s neighbours, including in Japan, South Korea , India and many smaller Asian nations. ‘Di Jihong’ and ‘Gao Jihei’ are signs China’s flattery of Xi Jinping has gone too far Many in Western capitals believe Xi is seeking to promote China’s unique model of authoritarianism and state capitalism as an alternative form of governance for developing countries to emulate. Harvard-educated Stanford political scientist Francis Fukuyama and many US politicians have warned that China under Xi may end up showing the world a hitherto-unimagined form of 21st century totalitarianism. BEST OF TIMES, WORST OF TIMES Thus after 70 years of communist rule, the picture that confronts us today is one of China at the best of times, and the worst of times. While the economic successes of the past 40 years cannot be ignored, political theory and history suggest it is only constitutionally free democracies that can make that final step to becoming advanced and developed economies. To date, every single nation to have joined the 36-member Organisation for Economic Co-operation and Development (OECD) has been not only a market economy, but also a free democracy. This fact alone should be enough for Beijing to pause for thought. While significant anniversaries mark the passage of time, offering an opportunity to recall past triumphs and honour past losses, such occasions also allow nations to reassess their past and rethink their future. Just as China’s rapid development over the past four decades proved the success of Deng’s free market reforms, its continued economic success will depend on its willingness to embrace modernity in governance – democracy, freedom and the rule of law. Doing so would not only accomplish what China calls its “national rejuvenation”, but it would also achieve exactly what the rest of the world is hoping for: a peaceful rise for the Chinese nation. ■ Cary Huang is a veteran China affairs columnist, having written on the topic since the early 1990s