I don't agree with you about Westerners not seeing the villainous wood for the evil trees, but I think it's moot when there's an even simpler explanation: they do not want to lose control.
Take a look at Bin Rasheed, or Li.
I feel like you just want to make a point about the CCP being evil. Fair enough, but that doesn't really have any connection with what you were trying to say about Western critical thinking.
Western critical thinking seem to be hell-bent on thinking that some grand totalitarian regime cannot be just "dumb evil," and it must always come with some kind of equally grand conspiracy, secret agenda, maybe even some semi-valid point, as they probably think "it must take some brains, complex motive, and talent to run you evil empire at such scale."
It's beyond them to concede that their grand political theories are not the case, and the man is driven just by your regular arrogance, greed, and cowardice, aka lust for power, even if his ways of achieving those may be quite sophisticated at the time.
The fact that the communist party made extensive studies of the fall of the Soviet Union has been well documented.
https://www.wsj.com/articles/SB10001424052702303755504579207...
Western people are not misunderstanding China, they just are content with a myopic tiny view, and happy to apply whatever judgement they can at the whim of the moment.
Discussing any China related issues on HN is like arguing with mobs. You either are drowning in downvotes, like saying Mr. Xi is not just a dictator; or arguing with someone who questioned any minor details you raised as a Chinese, often make me questioning did I lose touch with China so much that a random HN visitor actually knows better than myself...
I find it funny by how hard people of Western upbringing try find some "higher meaning" to what villainous characters do, the more powerful, and scarier they are.
And they do not want to take the most obvious, explainative, and floating on the surface explanation, because according to them, "it can't be that simple!"
A phrase I hear often is "I don't believe in cartoonish evil characters!!!"
And that despite much of 3rd world dictators very much being such, and their actions being very well explainable by "evil guys, doing evil deeds, because they are evil, arrogant f..ks," and that being their primary motivations, with all their "roleplay" obligations, and nominal official duties coming second to that.