I've explicitly stated the greatest advantage: scientific selection instead of random combination. Like I mentioned before, take the greatest minds humanity has ever produced like Gauss and Newton and mass produce them essentially on a factory line.You've still not given one advantage your idea has over natural births.
There are several other advantages like completely decoupling the birth numbers in China from the desires and circumstances of the population; the government won't have to worry about what house prices or tuition costs are or if people don't like their working hours - frankly, it won't have to kiss people's asses to have more kids. Since it will be raising these children itself, it will ensure that they are raised with proper values - put another way, there will be a "standard" Chinese upbringing like there is Standard Mandarin. One of the things I've been thinking about recently are the centrifugal forces that have been present in China throughout its history and the breakdowns they've led to. These tendencies would be absent in this population since they would not have a regional identity, only a national one.
You're confounding two factors: being raised in an orphanage and being an unwanted child. In usual circumstances they would be equivalent but here they're very different. Here these children would be very much wanted; they'd be a national treasure. When I say "orphanage" I mean something more akin to a panda breeding center than orphanages as they currently exist.Bringing up millions of children in orphanages is going to lead to mass autism and criminality in the new generation.