however, the CCP would hold less power over its people.
Yup, China's great problem is they now actively do not want to move past their current stage of industrialization. Leading up to Covid, they were fairly committed to trying to develop a middle class and services economy, to really catch up with the US wealth bubble and developer their own self perpetuating consumer class. What they found problematic was that the services consuming middle class expected more and more freedoms and control of their lives. Factory workers don't really worry much about what they're allowed to say or criticize, because their job is 996 on the factory floor. Meanwhile the creatives of the services economy actually do feel they need those freedoms to succeed or 'express themselves', and some of those freedoms ran anathema to the desires of the party.
Worse, they found that as the services sector expanded, the willingness of the young Chinese to dive into 996 labor plummeted. Nobody wanted to work as hard, because a growing portion of them were becoming the laptop caste and shirking real work just like in the West. Many more just refused to participate in the system entirely, Lying flat. So now they were facing a struggling, stymied services economy sector, who's mere existence was also damaging and threatening the industrial sector.
Few years ago, they started making a pretty hard push to say Fuck You to the services economy, double down on industrializing, and really sticking to being that global factory. Office Workers and Barista's only brought them problems, so they want the new generations of Chinese back in the factories and mines. Those new people can work hard, make their betters money, and are too tired to care about the propaganda - and they're still better off than the rural subsistence farmers that cover huge swathes of the country, so the factory workers still feel like this is a pretty good deal.
This isnt' to say they've given up on high technology, just that they now want to be an industrial powerhouse that also just so happens to have all the leading tech efforts, without the massive backbone of services labor that usually backs it. No idea if they can pull off any reasonable portion of it, but by god they are trying.