Yes Business is Business. But you could always do that business with democratic government as well. Why is china going out of it's way to support those governments with arms, vetoing in every opportunity it gets. you must be naive to believe that it's doing just for business.
It's just supporting a similar political structure that it has. But is it will of average Chinese or the people in those respective countries?
It can't be business as usual.
Regarding innovation I might be wrong. But I definitely read that paper. I study management at Harvard, I read so many papers, its hard to remember each and every one. Sorry, I'll try and find it. But, to put it in perspective, the paper didn't say innovation is not possible in authoritarian states, it just says it is natural in democracies.
I second what Cardsharp has said. Where does people get the idea that a democratic China will be more friendly towards the West. If today China is a democratic country, China will be more hostile towards the west than the pragmatic government China has now.
Letter from China: Angry Youth : The New Yorker