I think this is a very thoughtful long term strategy for a country as big and as globally relevant as china. Looking at the US and the decline of the middle class and the rise of the donor class shows where a country is headed when inequality gets out of hand. Right now the US is arguably not a democracy anymore but an oligarchy - that the Party looks to avoid going down the same road is of course out of self-protection. But it is also the very interest of the hundrets of millions who were left out of the distribution of the dividend of "opening" the economy. So - compared to a descend into a potentially fascist donor-run society it might be a better strategy to simply distribute the wealth more aggressively.