Still, other points I disagree with.

PRC's exports to the US are not falling; they fell in 02019 due to sanctions and in 02020 due to covid, but they're already back above their 02018 level, which was the highest in history. See https://www.census.gov/foreign-trade/balance/c5700.html. They probably will not fall within the next decade or two.

If US manufacturing becomes stronger, that will increase PRC exports to the US, not decrease them. (If the US doesn't have anything to trade for Chinese products, it will not get them, which may cause them to be sold to different customers or may cause their production to be reduced.)

I think increased interest rates abroad would tend to increase PRC's exports, not decrease them. As far as I know, PRC isn't borrowing money from abroad to finance expansion of production capacity; it's lending money abroad to finance consumption of its exports.

PRC's population is not shrinking, though it's barely growing and may start shrinking soon. Most of their trading partners have growing populations.

TSMC cannot be taken, even today; it can only be destroyed. Today, doing that would be counterproductive to PRC because so much of their domestic industry depends on TSMC, but the US has forced TSMC to impose sanctions on PRC's military. This is an existential threat to the PRC. If the sanctions continue, or are removed but could plausibly be reimposed, and TSMC remains strategically important, at some point PRC leadership will act to remove the military advantage this gives the US and its satellites over them, even if that means paving Taiwan with Trinitite. The alternative is to be unable to respond to military attacks from the US.

Reducing exports only improves your economy if the exports are stolen, for example in the Congo Free State or the Irish Potato Famine. Weaker forms of this are known as "Dutch disease" or "the resource curse". This is very much not the case in PRC. Historically, export-led industrialization has been by far the most important cause of economic growth. By contrast, your prescription of import-substitution industrialization has failed everywhere it was tried, including, for decades, in PRC.

Increased exports leads to increased specialization and increased capitalization, which increase productivity. Unless, again, we're talking about enslaved laborers who are not in a position to capture any value from their increased productivity, this increased productivity leads to increased earnings, which increases domestic consumption. This has been known for centuries and is agreed on by virtually all economists.

Your implications that Chinese people do not value education, and that lack of education causes low consumption in China, could hardly be more false. Chinese culture has prized education highly for thousands of years. It's one of the key distinguishing features of Chinese culture. Expensive private tutoring companies were a hot startup sector until the government crackdown.