James Mann’s “The China Fantasy: How Our Leaders Explain Away Chinese Repression” (Viking, 127 pages, $19.95) is not a book about China. As he writes, it is about the China that he has encountered elsewhere. It is about the West’s optimism, naïvete, greed, and, most of all, self-delusion. His thesis is simple: China is not democratizing, and for decades our leaders’ pronouncements have been dead wrong about the nation ruled from Beijing.

Mr. Mann, a veteran journalist and the author of “The Rise of the Vulcans,” identifies three possible futures for the world’s most populous authoritarian state. The most popular one is the Soothing Scenario, in which decades of economic development will inevitably lead to democratization. The Upheaval Scenario holds that China is headed for disaster. And then there is the Third Scenario: China will remain repressive for decades.

Mr. Mann quickly dismisses the Upheaval Scenario, arguing that China’s size makes it less subject to social pressures that would tear smaller nations apart. He acknowledges that the Chinese state “often seems to be on the verge of disintegration” but that it has an “underlying cohesion” (full disclosure: He identifies me as a proponent of the Upheaval Scenario).

Mr. Mann devotes substantially more effort to showing why the dominant Soothing Scenario will not come to pass. As an initial matter, he correctly directs us to “to keep in mind exactly what is changing in China and what is not.” What is changing is the appearance of the nation and of the Chinese people themselves. What is not changing, he notes, is the ambition of the Communist Party to continue to rule China. Senior leaders are becoming more capable autocrats as they learn to use repressive tactics in a speedier and more thorough fashion. “The Leninist system remains intact,” Mr. Mann concludes.

Why should we be concerned that China is following the Third Scenario? It is not, as many might assume, that Beijing will pose a military threat to America. We should want a democratic China for the Chinese people themselves and for China’s influence on other authoritarian states, he argues. And there is this: “If China’s political system stays a permanently repressive one-party state, that will mean that American policy toward China since 1989 has been sold to the American people on the basis of a fraud — that is, on the false premise that trade and ‘engagement’ with China would change China’s political system.”

Apparently, it is this last reason that impelled Mr. Mann to put pen to paper. As he did in “About Face: A History of America’s Curious Relationship With China, From Nixon to Clinton,” his second book, Mr. Mann traces the attitudes of the American political elite toward Beijing. In “China Fantasy,” he updates the story and then rips into Washington’s adoption of “the wrong paradigm for China.” Mr. Mann notes that Americans’ belief in the ameliorative nature of trade has led them astray. This theory has conveniently relieved policymakers of any responsibility to oppose Chinese repression — trade, after all, will eventually do away with authoritarian governance. Therefore, this theory permits economic relations with China to continue, regardless what the Beijing regime does to its own people, because the Communist Party will be forced to reform by the impersonal forces of history, grinding forward inexorably.

Mr. Mann has perfectly described the blend of hope and cynicism that currently underpins American policy toward China and the rationalization of policies that are ultimately injurious to America and the West. When we finally wake up, he argues, the modern Chinese state may have become so entrenched in global markets, supply chains, and the international system that there will be no outside pressure to reform its politics. He convincingly argues that the best time to prevent the emergence of a strong Chinese autocracy is now. Not surprisingly, this short book is essentially a long argument for a re-examination of Washington’s China policy. “There is virtually no public debate about the Third Scenario,” he helpfully points out.

Yet “The China Fantasy” contains only a skimpy analysis of the transformational power of trade in remaking society, in other words, of the Communist party’s ability to maintain a repressive grip over a modernizing society. Mr. Mann’s thesis stands or falls on his treatment of this matter. Despite what he says, the party’s viability is in question because, as the nation has grown more prosperous through trade, it has become progressively less stable. The number of protests has grown faster than the country’s economy, for example, and demonstrations are now larger and more violent. Mr. Mann is right to note that trade is not affecting the Party’s determination to retain power, yet it is empowering the nation’s people. And it is China’s ordinary folk who will have the final say as to whether their country democratizes.

Mr. Chang is the author of “The Coming Collapse of China” (Random House).