Regarding China being 'better off', again I think if one compared the metrics that I think are quite pertinent (infant mortality, longevity, literacy, unemployment, wealth inequality), China was doing very well and better than most of the Third World. I don't think using GDP or GDP per capita to analyze the question is enough. The point was that certainly by the mid 70s, when the very high of the Cultural Revolution (though I want to talk about this more as you mentioned it as well) was done with, necessities of life were decommodified and provided for most people. There were of course problems (the rural and urban divide, for one) but I think what ultimately made the economy function relatively well was that China had a large enough internal market to keep demands for production fairly high.
Regarding depoliticization, I think it really depends on what you regard as a revolutionary society. For me, such a society necessitates some element of mass participation, because otherwise I think the Party becomes disconnected from social reality. In fact, lots of scholars would call what happened after the reform as essentially a technocratic revolution - a class of cadres who became suspicious of the 'mass' after the Cultural Revolution and were trained mostly at Tsinghua in engineering and other sciences made it their mission to reformat the political economy in a way that the 'mass' could never again challenge elements of the Party bureaucracy. That chilled discourse in society in a very profound way. As to the excesses of the Cultural Revolution, I think we are often fooled into thinking it was a purely chaotic time for ten years. The Cultural Revolution actually formally ended in 68/69. Most of the violence that happened in the whole period, in fact, came when Mao turned on the Red Guards and sent the PLA to clear them out. What some authors argue is that Mao very clearly did fear the Party was going revisionist and needed disciplining by the people, but then ultimately backed down from going ahead with his real goal ('bombard the headquarters' ie restart the Party). So in some ways this wasn't even the consequence of the mass going crazy or anything, rather it was the product of a lot of politics going on behind the scenes.
I actually just completely disagree with your empirical evidence in that again I am not sure there is any real proof that the Maoist economy was crumpling or under any particularly dire productivity issues. I understand Marx's position on it and yes I would certainly agree there are some material limits that one runs into without a certain amount of capital accumulation. The question really is a matter of did China need foreign capital and demand to fuel its rise or could some form of sustainable development have taken place by replying on the internal market alone. China followed a playbook that was used successfully by S Korea in the 60s and 70s - have the state basically throws firms to the mercy of the international market in order to compete and grow, and use excess human capital to give them a fighting chance. It is a model that works for becoming a rich society, yes. But I am unwilling to state it is the only one.
In regards to Confucianism, it is actually pretty easy to see. I don't have an academic work on hand at the moment but there has been a lot of writing on the CCP promoting certain family values and Xi, for example, going to Qufu (Confucius' birthplace), making a fairly praising speech of traditional Chinese values etc. Actually you can see a lot of this cultural shift just by the way Chinese history is invoked. The 'five thousand years of continuous history' and other civilizational language was almost never used in the Maoist era, because it was seen as pretty ahistorical. I agree that it is, and I think it promoted a certain cultural chauvinism amongst the Han in ways that has manifested itself quite clearly in attitudes towards minorities etc.
In regards to negotiating with capital vs collusion, for me it is a rather simple question - look at reforms or lack thereof of mechanisms that have rendered huge sectors of the working class impotent. For example, Xi has talked about the growing divide between rural areas and urban ones as a massive issue. He has made a lot of effort to promote devopment in deprived areas and yes poverty as a metric has decreased, I won't deny that. But as one of the consequences of this divide, rural people have flocked to cities at huge rates. Not in itself any different from any developing country. But the issue lies in the fact that China's hukou system prevents rural migrants from accessing healthcare, from having their kids go to most schools, from being able to rent in certain parts of the city, from being able to buy land at all, and basically makes them an underclass due to their lack of institutional and legal access. This system is what has been able to fuel fast economic growth. Basically the principle is you can just take very cheap labor and then replace it (rural migrants have little choice but to leave after a few years, not by any formal mechanism but just because you do ultimately want to go back to your family back home and there are limited opportunities of advancement available to you in the city. So cities get fresh pools of labor all the time, providing wages to rural migrants that are better than rural areas but certainly very far off from 'fair' when looking at their contribution to the economy.
Pretty much every leader since Jiang Zemin has said they want to reform this. They've all done something - Xi implemented a sort of temporary housing permit that one can get if they have lived in a place for a certain amount of time and have a certain level of education. But no one, despite them proclaiming that hukou is an issue, wants to do away with the system. Largely, again, this is because both domestic capital and foreign capital requires this large pool of expendable bodies. China has noted at every turn that this gives itself an advantage in terms of luring investment and manufacturing from foreign across in comparison to say India. Maybe with an emphasis on dual circulation this may change but there are also growing cultural norms. Rural people are denigrated for being uneducated, having low suzhi (hard to translate, basically status of value as a person), lazy etc even as urban economies run on their efforts. Actually this is discussed a lot in rural workers' new literature efforts. There are some really harrowing stories, I'd be happy to send them your way.
Now some of these growing pains are to be expected when going through a phase of capitalist development, sure. But when does it really end? Mao certainly thought you needed state capitalism for a time, thus New Democracy existed for five years. Does China really need fifteen more years to complete a transition? If interest groups prevent reforms to stop the unceasing exploitation of rural migrants (who are, again, a huge portion of the population), can we really say with total confidence that all the new wealth and capital in the country that has captured the Party's interests will allow it to also jettison these interests and squash them eventually? Because ultimately if you believe in class struggle then you must believe that the Party is currently empowering the working classes to engage in a conflict with its homegrown bourgeoisie in order to reach a new form of political economy. What the 1980s represented (again, Wang Hui) was a reverse form of this wherein new bourgeoisie interests aligned with the party against mass interests and destroyed them. Will the 2030s really strive to completely undo that?
Regarding China being 'better off', again I think if one compared the metrics that I think are quite pertinent (infant mortality, longevity, literacy, unemployment, wealth inequality), China was doing very well and better than most of the Third World. I don't think using GDP or GDP per capita to analyze the question is enough. The point was that certainly by the mid 70s, when the very high of the Cultural Revolution (though I want to talk about this more as you mentioned it as well) was done with, necessities of life were decommodified and provided for most people. There were of course problems (the rural and urban divide, for one) but I think what ultimately made the economy function relatively well was that China had a large enough internal market to keep demands for production fairly high.
Regarding depoliticization, I think it really depends on what you regard as a revolutionary society. For me, such a society necessitates some element of mass participation, because otherwise I think the Party becomes disconnected from social reality. In fact, lots of scholars would call what happened after the reform as essentially a technocratic revolution - a class of cadres who became suspicious of the 'mass' after the Cultural Revolution and were trained mostly at Tsinghua in engineering and other sciences made it their mission to reformat the political economy in a way that the 'mass' could never again challenge elements of the Party bureaucracy. That chilled discourse in society in a very profound way. As to the excesses of the Cultural Revolution, I think we are often fooled into thinking it was a purely chaotic time for ten years. The Cultural Revolution actually formally ended in 68/69. Most of the violence that happened in the whole period, in fact, came when Mao turned on the Red Guards and sent the PLA to clear them out. What some authors argue is that Mao very clearly did fear the Party was going revisionist and needed disciplining by the people, but then ultimately backed down from going ahead with his real goal ('bombard the headquarters' ie restart the Party). So in some ways this wasn't even the consequence of the mass going crazy or anything, rather it was the product of a lot of politics going on behind the scenes.
I actually just completely disagree with your empirical evidence in that again I am not sure there is any real proof that the Maoist economy was crumpling or under any particularly dire productivity issues. I understand Marx's position on it and yes I would certainly agree there are some material limits that one runs into without a certain amount of capital accumulation. The question really is a matter of did China need foreign capital and demand to fuel its rise or could some form of sustainable development have taken place by replying on the internal market alone. China followed a playbook that was used successfully by S Korea in the 60s and 70s - have the state basically throws firms to the mercy of the international market in order to compete and grow, and use excess human capital to give them a fighting chance. It is a model that works for becoming a rich society, yes. But I am unwilling to state it is the only one.
In regards to Confucianism, it is actually pretty easy to see. I don't have an academic work on hand at the moment but there has been a lot of writing on the CCP promoting certain family values and Xi, for example, going to Qufu (Confucius' birthplace), making a fairly praising speech of traditional Chinese values etc. Actually you can see a lot of this cultural shift just by the way Chinese history is invoked. The 'five thousand years of continuous history' and other civilizational language was almost never used in the Maoist era, because it was seen as pretty ahistorical. I agree that it is, and I think it promoted a certain cultural chauvinism amongst the Han in ways that has manifested itself quite clearly in attitudes towards minorities etc.
In regards to negotiating with capital vs collusion, for me it is a rather simple question - look at reforms or lack thereof of mechanisms that have rendered huge sectors of the working class impotent. For example, Xi has talked about the growing divide between rural areas and urban ones as a massive issue. He has made a lot of effort to promote devopment in deprived areas and yes poverty as a metric has decreased, I won't deny that. But as one of the consequences of this divide, rural people have flocked to cities at huge rates. Not in itself any different from any developing country. But the issue lies in the fact that China's hukou system prevents rural migrants from accessing healthcare, from having their kids go to most schools, from being able to rent in certain parts of the city, from being able to buy land at all, and basically makes them an underclass due to their lack of institutional and legal access. This system is what has been able to fuel fast economic growth. Basically the principle is you can just take very cheap labor and then replace it (rural migrants have little choice but to leave after a few years, not by any formal mechanism but just because you do ultimately want to go back to your family back home and there are limited opportunities of advancement available to you in the city. So cities get fresh pools of labor all the time, providing wages to rural migrants that are better than rural areas but certainly very far off from 'fair' when looking at their contribution to the economy.
Pretty much every leader since Jiang Zemin has said they want to reform this. They've all done something - Xi implemented a sort of temporary housing permit that one can get if they have lived in a place for a certain amount of time and have a certain level of education. But no one, despite them proclaiming that hukou is an issue, wants to do away with the system. Largely, again, this is because both domestic capital and foreign capital requires this large pool of expendable bodies. China has noted at every turn that this gives itself an advantage in terms of luring investment and manufacturing from foreign across in comparison to say India. Maybe with an emphasis on dual circulation this may change but there are also growing cultural norms. Rural people are denigrated for being uneducated, having low suzhi (hard to translate, basically status of value as a person), lazy etc even as urban economies run on their efforts. Actually this is discussed a lot in rural workers' new literature efforts. There are some really harrowing stories, I'd be happy to send them your way.
Now some of these growing pains are to be expected when going through a phase of capitalist development, sure. But when does it really end? Mao certainly thought you needed state capitalism for a time, thus New Democracy existed for five years. Does China really need fifteen more years to complete a transition? If interest groups prevent reforms to stop the unceasing exploitation of rural migrants (who are, again, a huge portion of the population), can we really say with total confidence that all the new wealth and capital in the country that has captured the Party's interests will allow it to also jettison these interests and squash them eventually? Because ultimately if you believe in class struggle then you must believe that the Party is currently empowering the working classes to engage in a conflict with its homegrown bourgeoisie in order to reach a new form of political economy. What the 1980s represented (again, Wang Hui) was a reverse form of this wherein new bourgeoisie interests aligned with the party against mass interests and destroyed them. Will the 2030s really strive to completely undo that?