I wonder, why is it do you think that all this 'Economy of Scale' failed in Communist China? Why were/are the National industries horribly run - ALL of them. Why do you suppose that is? Why is it, do you suppose, that as the standard of living in China rises - there's so much nostalgia for the "Good Ol'e Days" ... back when eating was a luxury.
That sounds a confused statement of the state of affairs in a country that is in transition and not yet fully stable and settled in policy and development path. Until the situation settles, we can make no judgement about 'good ol days' or 'bad nu days' etc etc. The outcome will become apparent over the next decade or two once the global 'Arab Spring' and other tail-end coldwar/old ideologies/states get themselves sorted out as democratic social states joining the global community AS part of that community and not as 'piecemeal' rogue/failed/problem states which they have been.
The trend is that we all know what FAILED in the past: Extremism of one sort or another; and the 'divide and conquer' mentality/policy of old nations. The new global community is even as we speak forming around a moderate centre of reason and science and humanity/co-operation rather than confrontation and dog-eat-dog 'law of the jungle' approach to policy internationally and nationally.
Give it a few decades of further social reforms and anti-criminal/exploiter policies, and then let's see what needs to be further improved. Meantime, extremism and unfettered 'anything' was tried and failed. Reason and reasonable middle-way approaches to everything is needed now. Science, education, ethics and humanity will triumph in the end: it HAS to or all is lost anyway! Failure is not an option; especially as we are faced with global warming as well as global re-adjustments in economies and power/fuel etc etc.
Cheers and good luck and good thinking, everyone!