I would love to believe that, but the evidence doesn't support it. The People's Republic of China has walked that tightrope for a long time now, and isn't looking like it's gonna topple any time soon.
I agree that the historical pattern is that trade is the thin end of the wedge, and that capitalism usually leads to democracy. China is the counter-case. I retain hope, but not quite faith, that more trade and more contact will bring the tyrants down.
You certainly have a valid point. I believe, though, that China has been gradually loosening its totalitaristic control ever since the crack down in the late 80's, and they have gone much too far to ever turn back. The progress is certainly slower than I would prefer.