I spent 2 1/2 years in mainland China, in the early 1990's. I spent time in many different places from one end of the country to the other. I saw firsthand the things that are being discussed in this thread.
As far as the capitalistic trend, it all began because the ruling party began to realize that the socialist system that was in place could not support itself without trade with the outside world. The demise of the Soviet Union played a big part in this realization. They began to allow capitalist ventures in certain designated areas of the country. Shenzhen was one of them. These areas were called SEZ's (Special Economic Zones). Conducting international business outside of these zones and by businesses not sanctioned by the government was illegal for the most part, but there were some exceptions. It has always been legal in China to own a business and do business domestically within China. Taxes were very high for these businesses, but that's a different story. The government intended to keep the International capitalistic trade restricted to the SEZ's and santioned companies (which were nearly all joint ventures that the government had their fingers in one way or another), but they have essentially lost control of it. Now capitalism is rampant in all of the big cities. The Chinese have proven to be very astute businesspeople.
The one child per family mandate is a reality in the cities and larger villages. In many of the poorer, more remote farming areas, they are allowed two children. One of the things about the Chinese culture is that it is very important to have a boy. This has, in fact, resulted in female infanticide in some of the smaller villages, and has in some cases resulted in populations that are 75% male. As stated earlier, this has been aggressively addressed, but remains a problem. They way this was enforced is sort of complicated. Every Chinese person is assigned a Houkou when they are born. This is how the government tracks and controls it's population. It's sort of like a national ID system, where your ID is tied to a certain place. The government decides where you will go to school, what you will study, and where you will work. It is always a job working for the government. When you reach college age, if the government needs civil engineers, that's what they send you to school for and that's the job they assign you. It is not uncommon for a couple to marry just out of college, then be sent to different places for years. The wages are very low, in most cases thet equivalent of about $40.00 U.S. per month. The government offsets that by providing housing and subsidizing food and clothing. The houkou card you carry is what gets these subsidies for you, but you only get them if you are performing in the capacity the government has assigned you. You are free to pursue another career if you wish, but you lose the subsidies and housing and you are required to reimburse the government for your education. Travel from one province to another is restricted and can be difficult. They do this to prevent large influxes of people to the cities from the countryside.
Now the big cities such as Beijing, Shanghai, Guangzhou, etc. are highly capitalistic and getting more so every day. For the first time in decades, there are economic classes of people much like in the U.S. There is actually an upper class, middle class, and lower class. There has been an upper class and lower class since 1949 when Mao took control, but the upper class was all Government officials (high ranking Party members) and the lower class was everybody else. China is changing and there is very little the government can do now to stop that.
