> Did big businesses in the West really think “investing” in China would lead to “freedom” and such? Isn’t that framing a bit naive?

Yes I think. At least a lot of Western policymakers did buy a "change through trade/investment" story, and it wasn't pulled from nowhere because it had worked in the past.

In postwar Japan and later South Korea, integration into the West's economic system coincided with eventual democratization, closer alignment of values, and alliance.

It was reasonable to think the same thing would work in China, but that doesn't seem to be the case.

Also the US intentionally set China up for investment by doing things like bringing them into the WTO. All that investment wouldn't have happened without some level of government support.