China is staging mass celebrations to mark 60 years since the Communist Party came to power, according to BBC.
Vast lines of tanks, soldiers and missile launchers are being paraded through the capital Beijing.
President Hu Jintao has appeared on the rostrum at Tiananmen Square in a black Mao-style tunic, seen by analysts as a symbol of his control of the military.
He was joined by his predecessor Jiang Zemin, Premier Wen Jiabao and other senior leaders.
After a 60-gun salute, the Chinese flag was formally raised in the centre of the historic square - where revolutionary leader Mao Zedong proclaimed the founding of the People`s Republic of China on 1 October 1949.
The military parade, expected to show previously unseen missile technology, followed a drive-by inspection of the armed forces and a speech by President Hu which lauded China`s progress.
The president, speaking from the same spot where Mao Zedong had stood 60 years ago, claimed China had a bright future, had made global economic strides and would unite all cultures and ethnicities within it.
Security forces have been deployed in force across Beijing, ahead of a pageant featuring ordinary citizens, which will also take place in Tiananmen Square.
Some 30,000 people have been invited to watch the events, but others are being encouraged to stay at home and watch it on TV to "avoid complications".
Armed police in body armour have taken up positions at major road junctions in the capital, with snipers spotted on buildings along the parade route on Chang`an Avenue.
Roads have been blocked off, the international airport closed and the subway disrupted.
Many shops and businesses have been closed along the route and a new portrait of Mao Zedong has been installed in Tiananmen Squa
Some reports say the extravaganza will use twice as many fireworks as featured in the opening ceremony to last year`s Olympic Games.
National Day is an annual highlight for the Chinese government, but extra effort has been made to mark the 60th anniversary of what China sees as the start of its transformation from an impoverished country into a global contender.
On the eve of the festivities, the country`s leaders held a dinner for 4,000 people in the Great Hall of the People in Beijing.
Premier Wen Jiabao praised China`s development and said he was looking forward to celebrating "the centenary of New China" in 40 years` time.