What you described is more likely to happen in a society where citizens are used to high standards and these standards can't be maintained. Correct me if I'm wrong, but I think most Chinese workers only eat, sleep and work. How would you get them to the point of violent protest? It doesn't matter how bad the inflation gets when you're already at the very bottom.

Western countries are actually starting to imitate that system, because it allows for a somewhat peaceful submission of society at low living standards.