That's why we haven't become Xinjiang, IMO.
Personally I think that ship has long sailed and it's not particularly anyone's fault.
China desperately requires dollars to keep its debt problems floating and to interact with the global economy (relatively little is settled in Yuan outside of China's borders). Without a steady inflow of dollars China cannot function normally; their economy would seize up.
Hong Kong is a critical inflow port for US Dollars into China's economy and is largely spared from the tariff war.
This is why Hong Kong is so important to China right now, and it's also why China has been so careful in suppressing the protests (by their standards). China is afraid of the US changing Hong Kong's special status. People often don't think China can be swayed: the US slapped currency manipulator status on them, and they immediately backed off from letting the Yuan sink, carefully pegging it just inbounds near the 7 line.
Not to mention that many CCP members have a lot of investment in Hong Kong, a collapse of the HK economy, should the PLA be deployed, would be quite problematic.
But I generally agree with your observations.
Culture is more than the rack (or tailor) you buy your suit from. If you choose to wear one. Things like personal space and not spitting in public and not having to kowtowing to whomever is the current President, are things some hold dear. Others may not. Other still, may look to the past and ask: what started on 15th April, 1989 and ended on 4th June 1989, in Tiananmen Square, and elsewhere in China?
Do not expect Xi to do something sane, especially if he feels insulted. I think HK's best hope is for something else big to distract him. Unfortunately, I think it is very likely right now that he will invade HK and kill a lot of people.
I'm not sure if this will change your opinion, but this isn't true.
I asked my friends that are in China now to search for Winne The Pooh on Baidu and Bing, and they were able to find pictures of the character.
The are also Winnie the Pooh cartoons and movies and dolls readily available in China. Along with various merchandise for sale.
So no, it is not banned in China. Neither are time travel movies and TV shows, despite the English news reporting as such.
It wouldn't surprise me either, that the decision was made not by Xi, but by someone who wanted to appease him or the part or whatever.
Do you think there was ever a ban?
To maintain dictatorship, you need bullets, not money.
In USSR during Stalin, regular people were pretty much eating grass, but he never doubted his ability to do virtually anything to them without repercussions.
Soviet army of the time had a meal of 3 slices of dried bread and a millet porridge. Even Stalin's personal bodyguards were eating thin gruel, but none of them ever dared to do anything about that.
A tactic of trying to economically starve a dictatorship has no logic. Yes, you can cripple a country, but not the dictatorship itself.
In other words, great villains have exit plans, bad ones don't