It may actually break down well before that. There is probably something akin to the Laffer curve for the power of the central government. I.e. at a certain point, making the government more powerful will make the country poorer.
That's the standard line, but I'm not sure that it's as inevitable as that. It might well be that an efficient and well-run dictatorship or monarchy can compete with Western-style democracy (though I'm not sure China is "well-run" enough in this sense to be a good test case).
Boy would I like to believe that. What is the evidence from China that this is true? Perhaps their history of paternalism meshes well with tolerating the yoke.
We'll see what happens when there is a real hiccup in the system. They've enjoyed huge growth for so many years.
Note that I'm saying you're wrong, and people will tolerate political oppression while they have increasing material wealth. When things go bad, they might go really bad.