The People's Republic of China is riding high. As it celebrated its 60th birthday yesterday – the most auspicious day in the Chinese calendar – it was hard not to be awed by the spectacle of a great civilization stirring. Very soon, China will surpass Japan as the world's second-largest economy and, by some reckoning, will overtake the US, in purchasing-power-parity terms, within a decade. Just as important, China has recovered its self-confidence, lost during 150 years of colonial humiliation, civil strife and poverty. It has hosted the Olympics. It is making its presence felt internationally, buying up global oil reserves and influencing countries from Asia to Africa. It has floated the idea of an international currency to replace the dollar, a sign it regards the days of US pre-eminence as numbered.
Sixty years ago, few would have believed Mao Zedong's Communist party could have come so far. It owes its survival to its ability to adapt. Mao took the country down several blind alleys. Millions died through famine in the Great Leap Forward or were brutalised in the Cultural Revolution. Deng Xiaoping loosened the state's hold on the economy, unleashing China's extraordinary potential. But the party never loosened its grip on power. When students demonstrating in Tiananmen Square threatened to spark widespread rebellion, Deng had no hesitation in sending in the troops.
Yesterday's celebrations were awesome. They also smacked of triumphalism. One of the endless songs boasting about China's greatness contained the lyrics: “Nothing can stop us. Go. Go. Go.” Yet China's leadership knows appearances are deceptive. The economy is not as solid as it seems, fuelled by unsustainable government investment. Growth is too dependent on scarce supplies of energy and water. By uncorking wealth, China has left hundreds of millions behind, creating the constant threat of social tension.