Yes and no. Military readiness and potency doesn’t require liberal democracy. It does require skill and command, and sacking military leaders for political reasons is how powers from Athens to the Soviets screwed themselves.
So if the argument is that sacking a top general implies that China is too unstable to prevail in a future space race I don’t buy it.
China isn't in wartime, it is in a build up phase and there's perfectly good reasons to dismiss underperforming generals.
Which isn't to say that's what happened here, but China sacking a general as a data point doesn't mean anything without appropriate context.