You're giving China too much credit. The local governments are corrupt and really don't want the equally corrupt Central Government to know of their dealings. They would either have to be large enough to "share" the spoils or be thrown under the bus to illustrate how the "corrupt" Central Government is trying to clean up "corruption".
The Central Government has little concern for matters than 1) don't involve money, or 2) don't show China in a bad light. Roads are constantly being paved or "repaired" because corrupt officials skim the top and use substandard materials. This goes under the radar because nobody at the very top understands quality control. They pay the money and get the finished product, which just happens to need repairs two years later, but that is far removed from Beijing, as long as intake is greater than expenditures.
Everything is smoke and mirrors, that includes the 2008 Olympics. The intention was to impress (though I have heard that some CG was used, not sure if it was true or not), in your case, and many others, it seems to have worked. The Chinese are very proud (rightfully) and don't respond to embarrassment well, especially from the outside of which they are very cautious of. They (IMO) have a huge self-confidence issue, and will go to great lengths to mask it. It is becoming less so in recent years, mainly due to the one child program. These children are spoiled to no end, with no siblings to compete with and still a generation of large groups of close relatives. I'm not sure if this will be good or bad, only time will tell. One thing is certain, the deeply rooted caring for the elderly parents will run into problems. It was much easier with large numbers of children. Now the single child will have to decide whether to take care of his or her parents or their spouses. Retirement homes are few and far between currently. The Chinese government doesn't waste a yuan on social programs, unless it is for the glory of China.
India still has it's large family base. One can see it when family travels, it looks like a small tour group. While I'm sure India suffers from some similar problems as China, envy shouldn't be one of them.