They were smart enough to know that what amounts to an oligarchy can't plan everything reasonably well and decentralized some authority for less-important goods. The ultimate goal for socialism was decentralization; but for many, the real goal is more and more centralization because they trust few around them and figure they'll always have power over the central government. At least in overtly totalitarian regimes only the ideologically pure suffer from this form of dementia.
China, like the USSR, had the usual corruption, contamination, pollution, etc., etc., because when you have the same group in charge of growth, self-enrichment, and enforcement you're going to get problems. When party or group membership gives you additional rights and automatically means you're better than your foe, a lot of bad stuff can be ignored in the us vs them tussle and struggle for the realization of the full range of self-righteousness. The only way around this is nationalism, veiled as in the case of the USSR or very much front and center, as in China. "We're better, but we're not going to let you see how much better" coupled with "the Man's keeping us down, rally behind me and we'll fight the ___________ oppressor from abroad trying to take away what you'd already have if not for him." As though a high-tech wealthy civilization with a high life expectancy and lots of high-quality leisure time was the norm until capitalist Westerners came along and took it all away.
But when suddenly instead of planning for perhaps 100 products you have to plan for 100,000, your supply webs become complicated, meeting demand and qualty expectations becomes very difficult, and the economy has problems. Of course, when individuals make these mistakes and fail to sense how things are changing because they have antiquated reporting or because underlings are afraid to piss off their overlings or they are just set in their ways, it can spell ruin for a company. When the oligarchy makes these mistakes, the entire country's on the hook and you continue to produce steel of a quality that nobody needs or apt. buildings nobody wants. And because the economy's planned a few years in advance, you continue to do stupid things.
Stalin ran into this in '39 and the early '40s. Nobody wanted to give him bad news. So they made up good news. All those battalions of new, battle-ready tanks that were reported to be sitting at the ready; all the wonderful economic progress. Gorbachev's glasnost' seemed like an absurdity to many. It was truly subversive.
So, China, by all means. Rally around the Great Leader who has managed to get you into this bind because you can't really say that the Great Leader and his minions screwed up. The Great Leader only does good and pure things; all bad things are done by ideological foes. Flag, ideology, community, person ... for many, gods by another name.
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