1) The influx of wealth and information destabilizes any dictatorship. These wealthy billionaires, even if children of party members, know how good it is around the world. There will be rebellion from them and from the rising middle class Chinese. Think of the USSR after glasnost—openness of society destabilizes Communism.
2) The low Chinese birth rate (they are no longer reproducing at a replacement level) and the imbalance of men to women (40 million, if I remember correctly) leads to a driving force of millions of Chinese men seeking women outside the country. This will be another influx of new ideas to China.
3) Most seriously of all, the rising tide of Christianity in China. Perhaps a hundred million or more Chinese fervently follow Christianity in house Churches outside control of government. Since this is illegal, these are all sincere, devout, effective Christians—hence its incessant spread. Christianity outlasted the Roman empire and the Soviet empire. We’ll see the Chinese communist empire crash this century as well, perhaps within twenty years.
These trends are regardless of our trade policies with China and unstoppable, as far as I can see.
The Pentagon report disagrees with you.
Every dynasty in China fell because of revolt from the rural area, not the middle class/city wealthy. China’s main problem is the rich who are connected to powerful party officials and family. Most of the corrupt officials and CEO’s in China are children of party officials. Farmers are very angry as precious farmland are takened to build MacMansions and golf courses and compensations are 1/3 of what was promised. Any farmer that complains about the abuse is arrested and charged with sedition or rebellion. Local officials cannot be touched or charged because they have powerful relatives or connections. The only institution in China untouched by corruption is the military. Every year ten of thousands of Chinese soldiers retire, who were raised in a professional merit culture (promotion based on achievement, and less on connection). These men are givened government jobs after they retire from the military and many are apalled at the corruption and abuse of the farmers and poor in China. A number of the armed riots in China have been lead and organized by former Chinese soldiers. Failure of China’s central government will make these revolts more frequent and widespread. China will have revolution in the 21st Century and it will be lead by her military.