Roughly in chronological order, but exact time not accurate.
0. Lin Biao was never wounded in the war by friendly fire. (POD)
1. Stalin died.
2. MAO assassinated by Gao Gang. Gao Gang, the former ruler of Communist Northeast (Manchuria), tried to topple Zhou Enlai and Liu Shaoqi; but MAO who encouraged him in the first place, betrayed him. His real crime might be being too close to Moscow. There are immediately speculations that the Soviets killed Mao, but it was actually Lin's manipulations, who was smarter than OTL due to 0.
3. Liu Shaoqi succeeded Mao as planned, the planned economy expert Chen Yun was in charge of economy. Lin Biao barely kept his position since he was associated with Gao Gang.
4. Private businesses and farmlands remained in private hands, but there were smaller steps towards collectivization, which alarmed some people.
5. Khrushchev assumed power. Warsaw pact established (like OTL).
6. Soviets delayed the handover of Port Arthur.
7. Khrushchev gave the Secret Speech.
8. A Secret Speech triggered an Anti-Soviet movement in China, which took place due to the lack of Mao. People, raising party flags above their heads, demanded the truth of Mao's death to be investigated; Treaty recognizing Outer Mongolian independence to be denounced; Land collectivization and business nationalization to be stopped; Port Arthur to be returned. Mao, ironically, was generally portrayed as liberal and independent to the Soviets.
9. Marshal Peng Dehuai's unwillingness to put down the movement got his sidelined, Lin Biao, seeing the small base of the core of the movement, stepped in and put down the movement with some bloodshed. (A relatively small prize to pay as compared to the sea of blood OTL)
10. Soviets handed over Port Arthur, in exchange for China as an observer to the Warsaw pact (Closer Sino-Soviet ties than OTL).
11. New party resolutions encouraged business and farmers to sell their crops, promised no further land collectivization and nationalization of small businesses. (Great Leap Forward Famine Butterflied)
12. The party started to import (heavily censored and strictly non-political) books, movies and TV programs from the Hong Kong, Malaya or even the west to distract the urban elites and petite bourgeoisie from going against the party, like East Germany. (Mao would do away with them completely after the revolt, but China's TTL leaders needed them to develop the country.)
13 (1957) Soviets started to assist China in her nuclear program.
14 (1958-1962) A private rural and urban economy led to prosperity, which taxes coming from which could fund more industrialization. Collective from in the south established in the 1950s but progressed no further saved themselves by turning into light industry powerhouses.
Chinese People's Volunteers Army pulled out from North Korea. (One year earlier from
15 (1963) China got nukes 2 years prior to OTL due to the lack of Sino-Soviet Split. This allowed China to cut her increasing military expense (which was already lower than OTL since Beijing could use Soviet protection without worrying about a Soviet threat. ITTL China's military budget stayed below 10 billion US Dollars.
China vetoed Khrushchev's plan to re-approach West Germany, earning gratitude from East Germany. Sino-DDR cooperation intensified. They did not know of the extremely secret China-Bundesrepublik talks (Asshole

)
16 (1965) Lin Biao pushed for a downsized, lean and modernized army and a naval buildup. Army adopts East German style uniforms and rank titles, some units transformed to reach the high battle readiness of nationale volksarmee (NVA). Name of People's Liberation Army changed to People's National Defense Army (PNDA).
17 First secret rapprochement with Taiwan, to prevent Chiang, who was shocked by the nuclear testing, to carry out his ludicrous Operation Kuokwang. The following five years was know as the "Era of Re-approaches, where China normalized relationships with France, Japan, Spain, and Portugal, and established economic ties with West Germany, South Korea and South Vietnam. Normalization of Diplomatic relations with America was a low-profile event. UN seat seized by China from Taiwan.
18 This was followed by Four boom decades with western investments.
......
XX (2010) China with a strong economy (on par with Korea's level) was able to have smooth transition towards democracy, changing the name back to Republic of China and nominally united with ROC (Taiwan), who got a separate UN seat from ROC (Mainland)
Well, I was always obsessed with the idea of a better communist China, with more money devoted in economic development, reaching the high industrial standards of East Germany, and a thriving petite bourgeoisie like those of Hungary and Czechoslovakia, or even (in the end) a bit more liberal and democratic than OTL.
This is not impossible if small businesses stayed private and land collectivization was not carried out (butterfly away great leap forward). Better that the Party allowed private ownership and capitalistic practices in agriculture, a Bukharin doctrine. (But keep the land reform, albeit the cruelty).
Remember that lots of businesses that disintegrated in the reform era were actually per-communist businesses nationalized in early 1950s, had they stayed on private hands they would never lose competitiveness and end up sold to foreigners. (I wanted to say "if the State didn't steal the private businesses in the 1950s, they would have never ended up being betrayed to the foreigners in the 1990s", but I try not to be emotional).
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And would Soviet Union allow a semi-capitalist power to exist in the south? The answer is yes. As long as China stay close to Russia militarily. India was essentially such a state with a non-communist society but an ally with Moscow.
The above was why I want to make a Mao Assassinated scenario in 1954, the remaining communist leaders had neither the will nor the ability to carry out Mao's OTL collectivization of land and economy, and his later excesses.
The only thing is that it's hard to dissuade the communists from building their mammoth factories, which take care of their employees CRADLE TO GRAVE, but abandoned them all when they proved to be inefficient in a market economy.