I would just note that most people who rate economic freedom have placed China pretty low on the list. Not necessarily saying that their rankings were accurate or not, but a lot of people have tried to objectively analyze that.

Seeing "lots of shops everywhere" can be deceptive. Things like roving food stands, hot dog trucks, etc... these can actually be symptoms of poor economic freedom because those people don't have the clearance to actually (say) rent a store-front or go legit, so they're forced to operate in these sort of "grey market" informal economy settings.

That's "life finds a way", not necessarily a good environment for business creation....