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<< But if you looked at who was winning contracts in the west, where the real money is being spent (the stimulus, for example), it's domestic Chinese companies. That's because while China wants to do enough to keep the MNCs happy and their dollars flowing into the country, China wants to support its domestic industries so it can emerge as a global business leader. So they are giving very big money to Han Chinese in somewhat low profile ways. >>

While emerging as a global business leader might be a nice outcome, Beijing is more concerned about maintaining the status quo. In order to do that, they have been building a wealthy class of non-government officials. This group of newly wealthy entrepreneurs have gained much and have much more to gain from the current system and so will support the party's efforts to maintain centralized control.

This is why investing alongside the government in China is such an important step for success. Guanxi is an important cultural aspect that is good to understand, especially for foreigners looking to do business in China, but for individual investors, guanxi is less important than government connections and implicit/explicit government support. The line can be, and is intentionally, blurred, but I think it is important to understand the underlying current in order to form an accurate investment thesis.

As usual, this is just my cynical take on the situation and I am open to other interpretations.
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