Despite China’s 8.7 percent economic growth last year, double-digit annual increases in defense spending since the early 1990s, and holding $800 billion in U.S. treasuries, it is far from overtaking the U.S. role as global leader.  Its closed economy, undervalued currency, and state-controlled exports keep getting in the way.

In a recent column, Heritage Vice President Kim Holmes explains why. The Chinese invest heavily in our economy because it’s freer than their own. China only comes in at 140th out of 179 economies ranked in the latest Heritage Foundation/Wall Street Journal Index of Economic Freedom. Its controlled economic system blocks the very domestic reforms that China needs to lead in an open economic system. Even its growing military strength is no qualifier for great leadership status, because its actions do not foster confidence and trust. Finally, its values are not globally shared.

If China is ever to rise to the level of a trusted global partner, it needs to abandon its authoritarian ways, loosen its grip on the economy, expand freedoms, and become a democracy.  Only democracies, Holmes points out, provide the kind of accountability that builds trust. And thus only democracies “can lay true claim to world leadership.”