They managed okay up until now because the Chinese gov takes a ton of revenue directly from their industry. They have very low income taxes on the public and instead make a lot of money from their huge state companies and investments in their manufacturing, industrial, and tech businesses which are still booming. That helps offset the losses from real estate, which they also make money off from land sales. They act more like a giant bank than one that simply taxes and spends.

But their fiscal deficits have been growing quite a bit, particularly their local governments and they've had some pretty bad deflationary issues recently.

https://rhg.com/research/chinas-harsh-fiscal-winter/

It seems to me there are two parts to the economy - physical stuff like like buildings, trains, factories, people working etc which you can see if you look around, and the financial side like bank balances, debt which are basically numbers in databases which you can only see on screens and paper.

If the financial side goes wrong the government can kind of fix it overnight but printing/lending money, nationalizing bust banks and so on. But the physical takes a long time - you can't suddenly have a lot of high speed rail or trained engineers overnight - it takes decades.

The Chinese seem to plan ahead on the physical stuff like houses factories universities and don't worry too much about the financial.

The west seems more to worry about regulating the financial side and leave what to build to the market but that seems to have some aspects that can be inefficient.

Not that it's just east - west. The US has built loads of infrastructure at times and socialists have had many screw ups. Still there may be something to be said for having some sort of long term plan on the physical side.