China's goal under Xi is a return to the golden age of the Kingdom of Heaven, where all Chinese people exemplify the ideals and morals of the most civilized society on Earth. That goal is only tangentially related to the technical innovations they're making, and will eventually stifle them as the definition of "good citizen" and "proper pursuits" becomes more hardened and inward-looking (much like it did during the Middle Kingdom).
The autocratic environment might not be most amenable to free thinking and innovation, but then I'm not convinced that being free from autocracy is truly necessary for innovation to occur. Plenty of innovation occurred when Europe was ruled by Kings, or in 1900 Russia. Even within autocratic corporations, plenty of innovation occur.
Anyways, I don't wish for autocratic governments, but I'm not willing to dismiss China's ability to be innovative based on that.
They're good business, they offer more power to China, why would they change that?
And considering they're history, they've probably learned the lesson about the weakness of ignoring global technology.
And sure, they do have the "great firewall", but it's smart enough to let the science\technology in while filtering the politics out.
That's not true, and given the current trend (everyone gonna use TLS) it is impossible for the "great firewall" to be smarter. For example, HN is blocked in China.