> The theory is that including these countries sets up the correct incentives for liberalization, and that liberal markets beget a middle clas s which eventually demands democratic voice. And democracies are western-friendly.

That was supposed to be the plan, but the Chinese government didn't blink in 1989, when the demand for democracy happened. And they suffered no consequence for it. In retrospect that is when we should have realized that the script wasn't going to work.