that only considers bitcoin's mining incentives. the real danger of highly concentrated mining inside china's borders are incentives that are external to the bitcoin protocol.
here is one possible motive for such an attack: the chinese government forcing miners and mining pools to attack the network under threat of imprisonment.
now you might say this is an unlikely scenario, and maybe you're right, but it exemplifies the problem of thinking about this issue purely in terms of the bitcoin protocol. if the chinese government wanted to crush confidence in bitcoin this is one possible option---and since they can leverage the capital of miners (instead of their own) they can do it at virtually no cost.
It's still not fully external, attacking costs money, so even if miners are coerced to do this, they will run out of money sooner or later. The government can try to then spend their own money, but what would they achieve? The network will be down only for as long as the money are being burned, and imagine the public outcry when regular citizens will find out that their government wastes millions that could have went to healthcare or education.