China's education system is a no man's land. Schools have too much autonomy, they receive government funding, but they are not monitored.
The policy is still very defensive. The government doesn't know what's going to replace the economic activity that is being moved to China.
In particular, if another Bush government moves on to Iran, then oil prices would go very high and really threaten China's economic development.
About two-thirds of the country's earnings are obtained from government investment and exports, which won't reach the common people.
Government officials are still learning to trust the market mechanism. They are containing inflation, but you're building up more and more distortions in the economy.