Those bottom 500 million have seen zero improvement in 50 years inflation adjusted. They're also mostly peasant farmers, and it's illegal for them to own farm land - they're land slaves accordingly. They have no prospects, and have seen no real benefit from the labor utilization system, it has completely failed them.
The only meaningful thing China's system accomplished, was absorbing some of the vast, slack labor capacity for manufacturing. That would have happened by default minus the economic controls they previously had in place. China didn't have to do anything but take their boot off the throat of manufacturing. And now the manufacturing party is over, so they've turned to extreme debt acquisition and forced asset bubbles to fake growth.
There may not have been a greater economic myth than the story of China's rise, in the last century.
Firstly, dollar figures are useless in China as the USD/CNY exchange rate has varied significantly, the domestic economy is very dynamic (high inflation) and has surprisingly little to do with the international economy. The quoted figures, probably dodgy in the first place, are likely 15 years old.
Rapid evidence: I live in a 85% agricultural zone (5% concrete factories, 5% tourism to a nearby lake, 5% military) where people spend easily $1 each on breakfast, $2 each per dish at lunch or dinner, and up to $13 per dish if meat or seasonal mushrooms. Beers are $1-2 and people drink every day. Non-showy cigarettes are $2-$4/pack and the whole male population smokes, often easily 1/2 to a pack a day. Almost everyone has flat screen TVs (with a huge VoD library plus tens of cable TV channels), mobile phones, electric scooters (or cars, or motorbikes, or electric tractors), literacy and internet access (albeit with Chinese characteristics). Most people can afford to eat out almost every day. Looking west, all I can see are four storey private houses. Looking east, I see a small factory or two and more four storey private houses in a neighbouring village, beyond rich agricultural fields. A few year old major airport lies an hour to the northeast, and a city of six million to the northwest, currently building an extension of its subway line and a new highway here. People are materially doing very well - better than many part of the US - and this is a relatively poor province.
If you want to wax lyrical about China's rise being false, come and live here before doing so. I am currently putting together a documentary on the foreign community in the nearest city, which should dispel many of these myths. (TLDW; people from everywhere, lots of art, music, short working hours, safe, pluralistic society. Way comfier than the US. To quote a Californian I interviewed on the US, who has lived in Tokyo, SF, SoCal and Thailand but chooses to live in this part of China: "not my circus, not my monkeys")
I think it is a bit early to call that. They avoided all-out revolution by letting go of the reins a bit, but in the slightly longer term things could very well still go pear shaped or result in a re-assertion of power.
You seem to acknowledge that in the rest of your comment but that's inconsistent with claiming it is a success already, it's mostly early days in a pretty risky experiment.
Long term, it's hard to say what political-economic systems will look like. However, it appears China has so far achieved economic success via capitalistic economics without democracy. It does not seem that China is in any hurry to democratize. In its history, there has been at least weak centralization, never the less, centralization and strong central gov't is embedded in their collective psyche.
Well have to see how things play out, but it does not seem very promising. On the other hand, it'll be interesting to see which system can provide a better life for its population. It's not a given democratic capitalism is the only or best solution. Perhaps a different mix will win out.