Great quote. However you're under the assumption that China will always act in the best interests of their people. You are right in that should China harm the US economy they would enter a massive recession, but who says the CPC care?

Many civilizations (look at some of Africa and the Middle East for that last several hundred years) haven't particularly cared about their citizens beyond collecting tax. This helps to explain why North Korea and Iran do what they do despite the damage to their people.

The CPC cares about maintaining legitimacy and avoiding unrest. Their legitimacy rests on continued economic growth.

China has had massive popular insurrections in living memory and continues to have local ones to this day.