The full comprehensive answer you're looking for is Hao Shiyuan's books "How the Communist Party of China Manages the Issue of Nationality" and "China's Solution to its Ethno-National Issues."

In short, the original structural intent of the CPC for China was precisely that of a federal state based on the models of the USSR and the United States which had also influenced Sun Yat-sen's "Republic of the Five Nationalites." The contradiction was that China was a country that had always invited fantasies of partition. Churchill in 1901 during the Boxer Rebellion infamously said his "Aryan triumph" quote in the context of his own imagining of China's partition: "I think we shall have to take the Chinese in hand and regulate them. I believe in the ultimate partition of China. The Aryan stock is bound to triumph." That view for a federal system therefore evolved in the process of the historical and material conditions of the CPC's experience within the disunited China of the Warlord, WW2 and Civil War eras, which saw the British attempts to legitimate the feudal Lamaist theocracy's secession in Tibet, the Japanese attempts to carve away the Northeast as Manchukuo, the breakaway of Outer Mongolia, the incitement of the two Turkestan secessionist attempts propped by the Soviets in Xinjiang and the various warlord clique territories.

As such, one of the defining qualities of the Chinese polity as recognized by the CPC was its historical tradition of unity. This had largely preserved the territorial integrity, which is the sine qua non for all states, of the various Chinese governments throughout the torturous first half of the 20th century. In the materialist view that socialist governance must reflect the history and national conditions of the given state, this historical context was therefore instrumental in influencing the CPC's decision against a federal system, as Hao explains in this excerpt and cites Zhou Enlai's views on the matter in 1949:

Both the Chinese Soviet Republic founded by the Communist Party of China in 1931 and the Red Army’s political declaration of establishing a federal republic in China en route to the Long March can be identified as the Chinese Communists’ early attempts to inaugurate a federal republic in China. However, these symbolic advocacies and practices were unable to be realized due to their incompatibility with the national conditions of China.

Historical facts have testified that neither the American-style “one out of many” federalism nor the Soviet-style “union of constituent socialist republics” applies to China due to its unique ancient historical process and modern historical experience. Therefore, maintaining state unity and respect for diversity have been upheld as a national commitment by the people of all ethnic groups due to China’s time-honored history as a unified multi-ethnic state. Toward the modern era of China, which was heralded by the First Opium War in 1840, the state unity, political unification, ethnic solidarity, and territorial integrity of the country were seriously threatened and undermined by the foreign powers’ aggression. Neither the social conditions for Bourgeois Revolution nor the backbone forces for launching Proletarian Revolution were existent in Mongolia, Tibet or Xinjiang at that time. If these regions were factitiously facilitated for “national self-determination” and founding independent states, they would inevitably be reduced as imperialist powers’ colonies or spheres of influence. In addition, the Versailles Peace Conference in the wake of the First World War permitted no space for China’s national self-determination. Therefore, federalism is only a fantasy for China; it would only lead to national and state disintegration.

The federalism form of government tallies with the reality of the Russian Revolution at that time; however, it does not mean that the Soviet-style union of constituent republics is the only form of government for all the socialist states. Some federated states of Eastern Europe founded after the Second World War, for example, Czechoslovakia and Yugoslavia, successively collapsed after the dissolution of the Soviet Union. It was, fundamentally speaking, the inevitable result of divorcing from their corresponding national conditions.

In addressing the first session of the CPPCC, Premier Zhou Enlai stated: “China is a multi-ethnic country in which the ethnic minorities make up less than 10% of the total population. Of course, all the ethnic groups, regardless of their population sizes and levels of economic development are on an equal footing. The Han people should respect the religious beliefs, languages, folkways, and customs of ethnic minorities. We advocate regional ethnic autonomy under the pre-condition of maintaining the territorial integrity of the country. Any ethnic group is undoubtedly entitled to the endowed right of self-determination. But today, the imperialists intend to divide China by fomenting the independence of Tibet, Taiwan or even Xinjiang. Against this backdrop, we hope people of all ethnic groups will not be incited by the provocations of the ill-conceived imperialist forces. For this very reason, the name of our new administration is called the People’s Republic of China, rather than the federal republic. We shall implement regional autonomy in the concentrated communities of ethnic minorities to ensure their right of autonomy”. Zhou Enlai added: “the policy of regional ethnic autonomy, by means of ethnic cooperation and assistance, aims to achieve a common development and prosperity of all ethnic groups. It will, in turn, contribute to a prosperous, culturally advanced and unified China”.

By comparing the historical conditions and developmental path of China with those of the Soviet Union, Zhou Enlai expounded the reasons why the Chinese government established the system of regional ethnic autonomy as a basic political system: “Historical conditions and the revolutionary movement development have provided a sound basis for ethnic cooperation in China; therefore, regional ethnic autonomy conforms to the national conditions of China”. Zhou Enlai added: “in addition to their obvious different appellations, the regional autonomy of China and the federalism of the Soviet Union are basically different; the former is an administrative division under unified state leadership, while the latter is a loosely-connected union of constituent republics, which are essentially ethnically-based proto-states.”