Not all those companies are "shell companies". some of them are very real and the government agencies with which they are associated have become totally subverted and have become "shell agencies".
You get the same evils either way this happens of course. There's going to be a lot more of this stuff as China rushes pell-mell to resurrect the class society complete with a privileged nobility.
Yeah, I'm all broke up about the rise of Chinese astristcracy. /sarcasm
If 50+ years of Communism and a few Milena of feudal tyranny hasn't killed off the Chinese people, I doubt that Capitalism is going to do them any worse.
Frankly the most entrepreneurial people I have met happen to be of Chinese ancestry.