You can't mistake 1989 symbolism (reaction to Tianammen square) as deterioration of diplomatic allies while Chinese partnership with US & European aerospace companies went very well in 1990s. Problems started arising in late 2000s.
Well, you just can't treat the commercial launch activities as the symbol of diplomatic allies. In the past 5 years, West has been using Russian rocket to launch their own satellites, do you believe that Russian and West was in diplomatic alliance after 2014?
Let's see what happened after 1989, how this so called "diplomatic ally" did:
1989 – Tough economic sanction and hi-tech ban on China;
1994 - Chinese fighter jet and nuclear submarine confronted with US Hawk kitty Aircraft carrier group in yellow sea;
1996 – 2 x US aircraft carrier battle group deployed around Taiwan to stop possible Chinese invasion;
1999 – US bomb Chinese embassy in Yugoslavia;
2001 - China-US EP-3 collision
Does anyone still believe the diplomatic partnership?
US actuality backed China in its 1996 nuclear tests while put India under heavy sanctions in 1998. So India was never treated same way as China but rather was always sidelined and stonewalled & blackmailed with sanctions. US never even vocally tried to appease India when China was in its camp.
As I told you before, the Comprehensive Nuclear Test Ban Treaty was in effective in Sep 1996. The last Chinese nuclear test was in 29 July 1996. So, Chinese didn’t violate any part of treaty and Chinese didn’t need US support. On the other hand, India’s test was 1998, the first one after the treaty. Even though India didn’t sign the treaty, but in world’s view, India set up a bad example to other countries.
India had already earned a bad reputation in west during reunification of princely states, was a key ally of Yugoslavia since start, joined further anti-western camp with USSR, got its nuclear scientists assassinated, tried to disintegrate key US ally and faced USN in Indian ocean, tested nuclear weapons and built missiles & rockets against will of P5 members. Warming up of relations only started in mid-90s due to open market and later in late 2000s as China emerged as rival of west.
India just never posed itself hostile enough west or China.
At the meantime, West still supplied modern weapons, like Mirage 2000, Jaguar, etc.
Tell me what western weapon did Chinese get when she was in trouble with West (except 1980s)?
It still cleanly fails to back your argument. I said that profit gained by even biggest commercial launchers is mere peanuts in front of required budget of human spaceflight and extraterrestrial missions and PRC's modern space industry can't bear it alone.
What was the total revenue PRC generated through western launches to back its research programmes in that era?
There is no public official number of Chinese space spending. So we can use some estimated figure from West source:
Firstly, launch cost (include rocket) in 1990: $30 millions
(China launches U.S. satellite - UPI Archives)
Secondly, in 2012, US estimated Chinese space budget was $8.4 Billions
(CASI Conference China Space Narrative.pdf (af.edu)
If we assume the percentage of GDP not change, the 2012 Chinese GDP $8532 billion, so space budget is about 0.0985% of total GDP. In 1990, the GDP was $360.9 billion, so the space budget in that should be 0.355 billion when one launch was charged 0.03 billion (8.44% of total budget).
In order to give you an idea how big this 0.03 billion mean to Chinese at the time, let’s use Space X as an example: If NASA just gave 8% of all her budget to space X in 2021 for 1 shoot, the amount was $1.86 billion. In 2021, however, the total revenue of Space X was only $1.6 billions (
SpaceX Quarterly and Annual Revenue | Craft.co)