Chinese-American here.
The best thing to do when evaluating China is to be nuanced and think long-term. China's growth may be unprecedented, but more importantly, its history and makeup of 1.3 billion people under an authoritarian regime doesn't exactly have many existing examples. Many scholars, even those in China, would find it very difficult to predict what will happen. I've read pieces from economic journals that predict the Yuan to be the major global currency by 2020 to pieces that don't think the Yuan will ever have that impact. You can only develop a nuanced view. For example, in CO2 emissions per capita, China isn't even in the Top 30. However, that doesn't mean that things are rosy and that pollution in China is fine. It's not. While you can admire China's incredible investment efforts to combat pollution, you can also question the actual effectiveness of their initiatives. Newterp's comments, for example, are not helpful to the debate as it comes across as a sporting rivalry type of comment ("can't wait until they get relegated."). China's economy has a global impact, and a massive slowdown can cause issues for many people in many countries. But you also can't stand idly and only praise China for its economic growth as there are still serious issues with consumption, wealth gap, waste, etc. Look at things from both sides. The Communist Party itself isn't monolithic, and the population certainly isn't either.
For the football, it's similarly complicated. Football was always the sport of choice when I was growing up in China in the 90s. There was interest in football domestically and abroad. However, the national team never advanced (have since regressed) while other leagues are becoming more accessible and popular. As for other sports, basketball has become massive. Yao Ming helped push it forward, and the current NBA stars have kept the interest going. Much like in football, a lot of the interest is in a foreign league. Olympic sports helped serve up some country pride even when the country was dirt poor. China's goal was to compete among the best, not just in individual events but even team events. The women's teams in football, softball, and volleyball were world class. Now that China's accomplished the goal of doing well in the Olympics, it's interesting that those women's teams are nowhere near as good and even the last Olympics showing was quite shit. Maybe less of a fighting spirit? Hell, in 2008, China had the most gold medals. Hard to play up the underdog card after that.
So now, it turns to football. The initiative is to improve the grassroots and domestic leagues. Will it work? Who knows? The story will be very different from the United States because football was never that popular in the US. Not only are the big four (baseball, basketball, american football, and hockey) more established, there is also a massive culture of collegiate sports. NCAA basketball and american football are billion-dollar businesses. American kids also like to play multiple sports at once (american football in the fall, basketball in the winter, and maybe baseball in the spring). There are 2 and 3 sport athletes even at the collegiate level. Some even decide which sport to turn professional in when they're around 20 years old. It's a completely different way of thinking about sport than the football way with academies and professional contracts at 17. China, on the other hand, does not have the sport structure of America. Football can develop there the way it does in Europe and South America. The thing is, it will take decades for that to happen. There are a lot of factors at play, including things like the one-child policy. Under that policy, parents could be reluctant to let their only child to push into sports, arts, etc. Now that the policy is gone, parents may be more willing to let their kids explore creative careers rather than pushing them into math and science. Will that lead to more interest in playing football as a career? Maybe. Will these massive foreign signings generate interest in the CSL and in turn inspire young kids to play? Perhaps. It's too early to tell. Will a CSL team play in the UEFA Champions League? Highly highly doubt it. However, is it possible that China's push into football improves not only China's own league and talent but influences other surrounding populous countries (India: 1.3 billion; Indonesia: 255 million; Pakistan: 192 million; Bangladesh: 159 million; Japan: 127 million; Philippines: 101 million; Vietnam: 92 million)? These are massive countries and outside of Japan, there's not a strong football structure. Maybe the Asian leagues will improve in the decades going forward, and that the Asian Champions League will have much higher quality? Could there be a Global Champions League by 2060? Sounds crazy now, but the European Cup didn't exist until the 1950s. Things change long-term.
China, like in many aspects, presents challenges and opportunities. It could be long-term threat, but it's also an opportunity. There's enough interest and population to have domestic leagues growing while still supporting foreign leagues with massive TV revenues. Football isn't going to take off in a big way in the next 5 years and China isn't winning the World Cup by 2022. But long-term? Who knows?
Although the safe assumption is that the Chinese national team will be shit no matter what.
