In a recent article in China Review News, the author asked the question, "What is lacking in China’s economy?" The article answered with the statement, "It is not money that the economy lacks, but a market-drive mechanism and an innovation-encouraging system.
The article listed several examples of areas that lack a market-driven force. First, some government departments still favor a system of review and approval, and thus use administrative power [instead of market force] to allocate resources. Second, administration rather than the market determines the price of raw materials. Finally, state-owned enterprises and local governments dominate the market; they even act as if they are the market. Such policies inherently discriminate against private companies.
Source: China Review News Online, July 17, 2014