Macabe Keliher on what looks to me like the beginnings of Chinese crony capitalism:

"The whole system has developed in a way in which the official and the capitalist belong to the same group and the peasants are left far beneath," says Chen [Chih-jou], who is a research associate at Academia Sinica, Taipei. "A type of network capitalism or clique capitalism has emerged and been reinforced in the privatization process."

Meanwhile, profits have been shrinking production declining. Now local governments are competing to bring in foreign investors, but with politics still in command, it's not working.