China has elements of fascism and a planned socialist economy. I would personally say China is much more in transition.
The economy is becomming increasingly free market or capitalistic if you will. China calls it “Capitalism with Chinese characteristics.” IIRC the proportion of state owned enterprises in the economy is now down to 25% or so. There is still some price fixing, state planning and 5 year plans, but these are also becoming a smaller part of the economy. For example, petroleum prices are now at international levels whereas a few years ago they were set below international levels.
WTO is also forcing changes. For example, China has severely reduced cotton imports because they have large stockpiles. So, the domestic price of cotton is much higher than the international price, but the goal is to reduce these stockpiles ahead of WTO, and it seems to be working well. That said, easily could have unintended consequences such as increasing the cotton crop which will then get hammered when the cheaper cotton imports do come in.
Even the government is in transition. Okay, it’s still a strong central government that tolerates little to no threat to it’s rule. They want to stay in power. In that sense, it’s pretty facist. The Chinese communist party leaders are trying to walk the tightrope of increasing standards of living and personal freedom for the masses AND keep power and a lid on dissent. That’s a tough act. However, there is a lot of experimentation with democracy on the local level.
The nationalism card is also selectively being played. For example, the government bussed students in to stone the US embassy after the Belgrade bombing. That same government stopped students from protesting over the Hainan plane incident. It is really hard to paint this government in black and white terms. They are feeling their way forward, seeing what works and what doesn’t. That said, there is no popular support for nationalist actions such as taking Taiwan back by force. However, the Beijing Olympic bid is also being couched in some nationalist terms and I am concerned how the situation would be handled should China not be awarded the Olympics.
As far as entrepreneurs being recruited back into the communist party, well the cynic in me says that the communist party is simply trying to keep it’s mandate. There is a huge entrepreneurial class in China, and if the communist party can convince them that “to get rich is glorious” and we, the communist party, will continue to provide an environment in which you can get rich as long as you don’t rock the boat, then the entreprenuers will probably act like businessmen the world over and accept the status quo.
My conclusion is that the communist party is simply trying to stay in power, and bring capitalists into the fold is simply an expedient tool.