I'm not a China expert by any means, but it's pretty obvious to me if there's any sort of homegrown movement to democratize the government, any prodding by the U.S. can kill it. This was the situation in Iran, and why Obama stayed aloof when Ahmedinejad stole the elections.
The problem with China's (and increasingly, India's) development is not so much the power politics. Even if China became a big bad dog militarily, it's not like the U.S. isn't a 900 pound gorilla. It's the environmental concerns. China and India have almost two and a half times the amount of people of the US (each), and their governments think it's a question of their sovereignty whether or not they should reach a very Western level of modernity and consuming habits. Which is completely fucking idiotic, because if the rest of the world achieved Western standards of modernity the same way the U.S. and Europe reached it, let alone consumed at our rate... well, might as well eat McDonald's, drive our Hummers, and just forget recycling, because we'll all be fucked in 20, 30 years no matter what we do if that's the case.
To me... that's pretty much the reason why the world needs a democratic China. If the Chinese government is ok with poisoning its own people for the sake of meeting lofty economic benchmarks, think they'll care what they do to everyone else? I mean, it's only in the last 10 years that in the United States we've really become collectively conscious that this is a huge problem. If China, India, and the rest of the developing world acts like the Republican Party and pretends the planet isn't reaching its carrying capacity because of *how* we consume, then, well... uh... yeah.
We're pretty much fucked if the Chinese don't get a government that's far more responsive to its own people and can be held accountable through *open* elections.