....If some foreigners believe that China can have nice smooth transition to more transparent and representative government, and their Chinese business operations weather this period without much complication, they are dreaming.....
The extremes are an angry bloody revolution and a kumbaya love fest. Neither will happen. The communists will be gradually made meaningless as the transformation takes place. The people will exert pressure but will not make big waves.
There can be great argument and disagreement about the size and number of the bumps in the road but there can be no argument about the journey. It is underway. it will take a long time.
Perhaps. Perhaps not. Contrary to the Western image of China as a monolithic, homogeneous behemoth there are many critical cultural, ethnic, geographic social and economic subsets within the PRC construct that will come unglued rapidly at any opportunity. Remember the USSR - It was viewed the same way and, when the opportunity for it's similarly composed amalgamation to break free presented itself the end was fairly rapid.
The communists are all ready incredibly bloody, now today, in 2005 as they have been through their entire regime.
They will shed a lot more blood before it happens.
Obviously you instinctively know this and present the idea that they will peacefully retain power ("The communists will be gradually made meaningless as the transformation takes place.") and rule forever.
Your scenario is the commie Kumbaya one.
Strange that you would make fun of the Kumbaya one.
This is utter pabulum.