This article (tip to Real Clear Politics) describes China's apparent progress as a sham.
Two points leap out at me. One is in regard to the economic "miracle" taking place:
Doing his own calculations, adjusting for what he believes are fudged numbers, Mao Yushi arrives at a growth rate of about 8 percent per year. That’s a healthy rate, due principally to the shift of the idle or unproductive peasant population to industry, but as I point out to him, it’s no more than Japan and South Korea achieved during their take-off phases. “Correct,” Mao replies. “So it can hardly be called a miracle.” Moreover, the 8 percent doesn’t take into account the vast environmental destruction caused by China’s rapid development.
I've written about this again and again. The most efficient peasant put into the most inefficient factory will increase your GDP immensely, as the Soviet Union did for years. One day, Peking won't be able to move peasants to factories and the growth they absolutely need to maintain legitimacy will wither. With the example of the former Soviet Union nearby, I doubt the Chinese Communists will take this problem lightly.
The second is the cruel nature of the regime despite the hopes that economic growth will make China more free:
Villagers often told me that it wasn’t the local Party secretary whom they most hated but rather the family-planning agents. To ensure the proper implementation of China’s single-child policy (in some provinces, the limit is two children, if the first is a girl), the agents keep close watch on childbearing women, often subjecting them to horrific violence. In 2005, a family-planning squad targeted the city of Linyi and its surrounding rural area, in the Shandong Province, because the population had far exceeded the Party’s child quota. The agents kidnapped 17,000 women, forcing abortions on those who were pregnant—in some cases, immersing seven- to eight-month-old fetuses in boiling water—and sterilizing those who weren’t. The agents tortured the Linyi men until they revealed the hiding places of their daughters and wives.
No right to choose there, eh? This is cruelty on top of cruelty, courtesy of the Chinese state. They quite literally destroy families. Where babies are enemies of the state, who is immune?
With a state both cruel and failing economically, governing a continent-sized population with a history of fragmentation, I don't know why we need to guess which course the government of China will follow. The continent of China is big enough that it could follow all the possible paths.
The current Communist Party might retain control of Peking region south to the Yellow Sea, Manchuria, and Inner Mongolia in a rump (though still large) People's Republic of China.
Tibet and the Moslem far west could regain independence under local ethnic rule.
The central poor and rural provinces might revert to real Maoism that promises peasants a better deal.
The regions in the southwest, adjacent to Burma, could become simple military dictatorships of varying degrees of harshness and varying connections to the drug trade.
Hong Kong might become a new Singapore with real democracy.
The coastal provinces might become full blown free market economies with either democracy or autocracy, or steps in between.
In a country the size and complexity of a continent, many futures are possible.