Some of China's issues are just related to the country itself and that anyone who ruled China, even if they were complete American puppets, would have beef with their neighbors over the South China Sea, have border issues with India and separatism in Xinjiang. If the KMT had held the mainland and the CPC was stuck on Taiwan the KMT would have already invaded Taiwan by now, with western support. The KMT and CPC worked on the common project of unifying China for six years. There might be an alternative history where the united front doesn't fall apart (with the KMT remaining the stronger and larger of the two) and a Republic of China becomes just as prominent and independent (and at odds with the US) as it is now. But it's possibly more likely that the ROC would have become a comprador state like a lot of other US puppets. But it would be a comprador state with a separatism problem in Xinjiang.
Some of China's issues are just related to the country itself and that anyone who ruled China, even if they were complete American puppets, would have beef with their neighbors over the South China Sea, have border issues with India and separatism in Xinjiang. If the KMT had held the mainland and the CPC was stuck on Taiwan the KMT would have already invaded Taiwan by now, with western support. The KMT and CPC worked on the common project of unifying China for six years. There might be an alternative history where the united front doesn't fall apart (with the KMT remaining the stronger and larger of the two) and a Republic of China becomes just as prominent and independent (and at odds with the US) as it is now. But it's possibly more likely that the ROC would have become a comprador state like a lot of other US puppets. But it would be a comprador state with a separatism problem in Xinjiang.