We've had trade relations with a lot of different countries. Some of them became successful exporters. Many didn't. China could have become one of the failures, rather than the (apparently) great success that it is.
The goal at the time was to separate Russian and China, to tie us closer to China, and maybe encourage something capitalistic in China. That worked.
But we didn't have to become dependent on China. We didn't have to gut our own industries. It wasn't planned way back in the 1970s either.
You touch on exactly the right issues, and overall I agree with your take on it.
It was a brilliant strategy to play off China against Russia, even if only making Russia second guess the situation.
It really helps to have lived through those times and understand the dynamics in play at the time.