This is materialism in action. Their ideas are crashing against reality and even if it takes a while, reality wins out in the end.

Reverse engineer geniuses

I'm sure the CPC and Chinese industry made efforts to effectively reverse engineer technology, but a vast majority of "IP theft"/reverse engineering cases are western companies agreeing to share information to have their shit made in China. Guess what, people who have been making your product for years who have developed the know-how to make their own version will be much better than the people who haven't set foot on a factory floor in decades. It's deindustrialisation on the small scale.

Awful system on paper

I guess any system looks awful of one's head is up their ass, especially if it's not endemic to their intestines.