The problem is that if China want to move up the chain ladder to become high income country, it can't keep hiding behind its developing nation status. Brand image is important. You can't sell luxurious goods coming out of developing country. Who want to buy an expensive Hermes bag if it came out of Vietnam or India?
As for sinophobia, don't let it curtail your movement and ambition. Sometimes, if you can't make them like you, maybe it is better to make them fear you. When they fear you a bit, it can put you at a disadvantage. But if they fear you a lot, you might get with your way. Like Meirsheimer said, the US is a ruthless country, that's why you want to be on its side. Maybe it is time for China to show its fangs. The west keep saying that wolf warrior diplomacy has failed, but when was the last time they meet with Dalai Lama? It was a long time ago.