Even Socialistic China is allowing large swaths of capitalism to be applied to its economic structure with some limited degree of success but will never be able to realize its full market potential unless it completely relinquishes its governmental market controls.
There are no success driven incentives for the individual at the very elementary levels of socialism, that is why socialistic countries rely heavily on the west for innovation and production.
Excellent analysis! China is in an unstable state economically and socially. It will be interesting to see how it plays out. The positive side of the China situation is that its government has a full employment policy and is using the free market to attain it.