They are catching up, which is a net good for humanity. The highbred command/market economy and the focused bureaucracy of the Party have has been amazingly effective at industrializing and modernizing China. They have lifted many people out of poverty in a very short time.

Catching up and innovating are different though. There is so much structure and even culture in China that will make getting ahead in tech and science very difficult.

The protected industries and closed internet incentivizes making copy cat businesses. The lack of established academic institutions hurts research. Innovation depends on individuals, and the lack of individual freedoms does make staying in china less appealing to talented individuals.

I really, really hope china can become more open and democratic. That would be an amazing win for humanity. More opportunity and freedom for more people! For a while they seemed to be on the path to doing that but with Xi staying in power indefinitely I worry that what the powerful and rich want is at odds with what would be best for the population.