The two aren't mutually exclusive. In fact, most people believe both are happening. I don't think anyone doubts the middle class in China is on the rise, the question is, "at what cost?" If they're rising because of China's economic bubble, when it crashes, they're going to be worse off than before. Potentially much worse off. Some economists believe that when China crashes, it will be the worst economic disaster in recorded history. Now whether that's true or not is another matter, but the fact that people are even making those claims can't be good. There's some substance there.
I don't really understand the prediction that china is a bubble, you have a huge population getting education and experience, and you are doubting there is a huge amount of value to be derived from them? People think predict it's a bubble because it's ridiculously huge, but that's just as likely to be because China is ridiculously huge... no?
As a contrast, western expats in China seem to be all about the complaining. Except when they suddenly start defending party policies when discussing with a foreigner who is less knowledgeable about China.