Wasn't that the whole idea - for them to stop producing and polluting the planet? That giving them food would be cheaper. Of course it would threaten our dependence on cheap clothes and expensive gadgets.
People don't sit around on their bums for too long - it's just not in our nature. If they weren't slaving away in factories they might end up as a society that primarily produces cultural capital (huge social stability there) or they might develop a service-based economy. In the wider scheme, Chinese manufacturing is probably more important to the west than China.
But at least we have "cheap" consumer goods!