China should really change their hard-handed policies but i doubt that will happen anytime soon. However, what that can potentially happen is that they will learn over time as Buddhism infiltrates their government more and more of their officials learn about Buddhism and do something about it and the stance start to soften. The hard stance is actually to help keep things in check as it is not easy to govern such a country with soft skills alone. A hard stance is necessary to make an example of people.
I disagree with what you have said about changing their policies. With such harsh policies, it is already possible for the Tibetans to cause chaos within Tibet. Just imagine what would happen if they soften their policies. It would only be able for China to soften their policies if the Tibetans stop being so extreme about things and have more respect towards their current leader, the China government.