I'll take a much more third-handed, unsophisticated view. Think of it as though you have three groups: the elite, the ruralites and the urbanites.
China's political/business elite wouldn't let it happen. They have, from what I have read on China (which isn't alot but probably more than most), such a ridiculous level of influence on all facets of the economy, the military, finance and social institutions that what they say goes.
The masses like the status quo. They realise that there are opportunities in the cities, but they don't take it because they are content with their lot in life. As the wise-one said, there are clearly two China's - and the potliburo doesn't mind. They know that if they continue on the path that they are on, that the masses will move on up when they decide to.
The other thing with China is that the sheer scale of the country & the number of people means that in a few decades they will, for all intents and purposes, be an almost self-contained economy (probably bar food security, but they will figure that one out). They will also have greater impact on global political, social and cultural affairs than they do now, because their clout will command it. I think the urbanites of China are happy with this, and as long as the flames of economic prosperity keep burning they won't have any issues with the regime.
To put my economist stamp on it, China is in a social steady state equilibrium; those that want opportunity and all it entails can take it, while those that don't just don't.
EDIT: I realise I started writing a sentence, went off on a complete tangent, and ended up with an English clusterfuck of epic proportions.