China as a rising force has been etched in our minds for the past decade. Yet there is a strange development that had made some nervous: while its influence spreads more extensively, it heads in a less than assured direction.

China has done little to transit to a democracy. The arbitrary crackdowns on those who are forthrightly and publicly critical of the government are occurrences peppered throughout their history. The Arab revolution that has been occurring the past few months has heightened China’s sense of nationalism, causing Tibet’s political status to be more sensitive. Recently, the authorities arrested eight Tibet monks when they refused to participate in events organized in celebration of the 90th anniversary of the communist party. Their resistance was to make a statement against the repression on Tibet by Beijing.

Like China’s problematic internal politics, its economy that has seen extraordinary growth over the past decade is now in a predicament. Much of China’s GDP is driven by real estate construction and this unprecedented bubble could potentially burst. The large amount of spending on public projects is to prepare the moving of people from the rural areas to urban centers. Yet, cities are already sprouting up even before the relocation is under way. And there is no certainty as to if they ever will be filled. Suffice to say, the cities are becoming ghost towns.

Only around 30,000 people currently resids in Kangbashi, a city in Inner Mongolia. But the government continues to invest $160 billion in the city’s real estate construction in order to provide accommodation for an expected one million people. Twenty other cities in China are similarly facing this situation, Bloomberg TV reports.

With local governments pushing these projects, assuming their provinces have huge potential for urbanization and development, all these investments might be waste, becoming default loans on the bank’s balance sheet. The local debt caused by the central government’s accelerating investments is already problematic. At $540 billion, Lina Song, a professor of economic sociology and social policy at the University of Nottingham, says it is a “time bomb waiting to go off.”

What is certain: China’s cultural protectionism. There is a strict quota of 20 foreign movies imported each year, and they are restricted to a limited number of theaters. While most of the world are watching the finale of Harry Potter, Chinese theaters will be screening the propagandist movie Beginning of the Great Revival. Earlier last year, Avatar was pulled from the screens in favour of a movie on Confucius.

China has long struggled with the contradiction of either learning from the West or following its own course. In the late 1910s to the early 1920s, the New Cultural Revolution arose out of rejection of traditionalism. It was a led by intellectuals who pandered towards Western ideas, albeit to different degrees. However, the revolution culminated in the May Fourth Movement after sentiments of betrayal by the West at the Versailles Peace Treaty rose to the fore.

The parochialism today is different as it is a reaction against Westernization which China has experienced since 1978 when Deng Xiaoping set in train the transformation of the country’s economy with his “open door” policy.

Moreover, with the imminent leadership change, there are more reasons why the world should be on its toes. Bo Xilai, touted as the “Man of the year” by People’s Daily online poll, is running for the presidential elections in 2012. He currently helms the chief position of the Community Party official in Chongqing, the largest city in China. In 2008, he launched a Red Cultural Campaign where he promoted 45 songs that were popular during the country’s revolutionary period in hope to replace the pop songs. The media stations also suspended programs during prime time showing instead classic revolutionary dramas.

The pessimism, however, should not be overstated; China’s is not perceived to be going downhill anytime soon. A recent PEW survey shows that 15 out of 22 nations believe that China will replace or have already replaced the United States as the world’s superpower.