In reverse order, obstacles first: There's not much debate about the scale or impressiveness of what China has achieved in the past 30+ years. Through that time its economy was (largely) opened, and its political controls were (selectively) removed. As a result hundreds of millions of people moved from rural poverty to the middle class and beyond; the country regained its pride; the landscape was covered with factories and skyscrapers and shopping malls and high speed trains; and a thousand other aspects of life were changed. This really has happened, and the achievement commands respect.
The interesting question is what comes next. The two main, opposing points of view boil down to "they're still gaining momentum" versus "now the hard part begins." The first camp leads to graphs like the one below, typical of the "New Chinese Century" / "Bow down to your Chinese overlords" books and articles that periodically appear. (The graph was taken from a particularly credulous version). Essentially this view assumes a straight-ahead, compound-interest, years-into-the-future extrapolation of China's recent growth trends.
The contrary perspective holds that things are about to become harder for China -- in economic, social, and political dimensions all at once. The main reason for the increased friction is that the very traits that have sped China's development over the past 30+ years may impede the next phase of growth. For instance: to-hell-with-the-environment development policies made China the world's factory; but now they have to be reversed -- even while the country is still, on average, quite poor -- lest it become the world's cancer ward and birth-defects center. The kind of intellectual-property laws that make it easy to buy pirated movies, music, or software on any Chinese streetcorner were a catch-up advantage. Now they're a handicap to ambitious, high-value Chinese firms. Control of the Internet, media, and political discussion has been convenient for the leadership. But those same controls make it harder for China to develop "real" universities, retain first-rate researchers, and bring the best out from its own most talented people. (See Matt Schiavenza's new item on this point.) And on down the list.
Not to be coy about it: almost everyone I'm aware of in the first, China-uber-alles camp knows China mainly via charts, and at a distance. Most people I know on-scene are instead in the "anything is possible, but it's going to be a lot tougher" category. And that is the case I argue at length in China Airborne, where I look at the country's ambitions in highest-tech and -value industries as proxies for its potential.
To wrap this up, there's is a good three-part presentation statement of the "getting tougher" case by George Magnus, in The Globalist. Part One is called China and the End of Extrapolation, and you can follow links to the next two. Judge for yourself, but I think he presents the "tougher" case very well. And if you'd like the most amusing presentation of the "holy moley, they're going to take over everything" original view, I refer you to the immortal "Chinese Professor" TV ad.
Now, dreams. The Atlantic Wire has an item today saying that frequent references to "the Chinese Dream" by Xi Jinping, the new Chinese president, may reflect the global influence of the NYT's Thomas Friedman, who wrote a column back in December to the same effect.
I can't prove that this correlation is wrong, but (no offense to Friedman) I'd bet any amount of money that it is. As several commenters, including me, have noted on the Wire item. It certainly is true that Xi Jinping has been talking about the "Chinese Dream," and it's true as well that Friedman wrote a column about it a few months ago. But the "Dream" formulation has been a familiar one in China for years, including explicitly in Xi's own speeches for more than a year. Back in 2008 the motto for the Beijing Olympics was "One World, One Dream" (一个世界同一个梦想), and for a few years before and after the Games there was a lot of chatter in China about the meaning of its dream.
The title of my wife's book Dreaming in Chinese (above), which came out two years ago, was based in part on the importance of this theme; a recent book by Gerald Lemos was called The End of the Chinese Dream (right). I had a long essay on this site a year ago with the title "What Is the Chinese Dream?", and most people who have written about China have similar items in their inventory. There's no reason the Wire writer would be aware of this background; I mention it because it's worth underscoring the fact that a national dream is not a unique American concept.
Update: Whoa! I see via Isaac Stone Fish at Foreign Policy that Thomas Friedman is saying he deserves "only part credit" for the use of the term by Xi Jinping, saying that the rest belongs to (a friend of both Friedman's and mine) Peggy Liu. I'll leave it at that, and with the note that maybe Xi is catching up with the many other people in China whom I have heard talking about this concept for years and years.
And I just remembered that I'm actually headed back to Beijing tomorrow for a short trip, so this will be one more thing to ask when I arrive.
Update-update: And via Jeremy Goldkorn and Danwei, here's a similar speech from back in 2009.