China - incentivise me

China's rapid growth has been a huge success but much of the money being invested is in the hands of local state officials - party members - whose rewards and punishments don't always encourage a long term perspective. The waste, inefficiency, environmental damage and hardship this causes will have consequences. Some observers are quick to blame state intervention in the economy as bad per se, but S.Korea, Taiwan and Japan have all shown that positive results are possible. It may depend on what kind of state is in charge. In China when the policy is to reward growth it may become growth at any price as local officials are given promotions for getting big new projects started (rather than finished) and local VAT is collected from the factory not the retail outlet. Anything that may hold up these new investment projects - compensation for farmers displayed from their land, spending on environmental protection etc. - can be set aside if the local party men are looking for quick advancement more from the Asia Times... A lack of oversight of any kind means there is no real control locally - unless promised democratic reforms are put in place.