That flag of ancient China refers to the final dynasty, the Qing (pronounced ching) dynasty.
The many dynasties of China ebbed and flowed. Confucian thought was the main thing (not so much mythology) and confucian thought still effects China today.
Communist China has good reason to remove those things, no matter how annoying they might be to have been gone.
and WHY DO YOU THINK THEY WOULDN'T CENSOR A REVOLT THAT TRIED TO THREATEN THEIR AUTHORITY?! Do you think that China wants that to happen again? Certainly not.
As for another thing, 中国(China) has probably surpassed Russia by now in military might and has a better economy, making them the second best IN THE WORLD. That may mean that they weren't on the tippy top like the Song and all the other dynasties, but it won't topple like the Qing did when Europeans came in guns blazing.
Also, note that ancient countries are no better than now, for example, the Roman Empire crucified people as a capital punishment. Pretty bad.