You're right, but you're also thinking way too big-picture were saving face and corruption play a daily role. You're missing the crazy chaos that happens on a daily basis on a small scale - which is both positive and negative. This same friend for instance decided to open up a restaurant. It's on rooftop area with a few other bars.

It's zoned as residential property but that's not stopping anyone. In general, as long as you're not bothering anything no one cares about any regulations (again, on the small scale. If you you're big and have money and people want to fuck you over then there is no escaping it. On paper this is a socialist system and they have the laundry list of regulation to back it up).

He doesn't get permits to build walls, to put in a bar, to tear out half the place and put in something completely new. There is no health inspection, liquor license or firesafety inspection. It's basically, go rent a property, hire a bunch of people to do the manual labor, remodel and you're cookin'!

In a way the little guy has a leg up on all the commercial chains that do have to follow the rules

And everything in China kinda works like that. No months of planning, chasing investors, getting permits, getting licenses pussy-footing around and figuring out your supply chain. They just go and do it. It's the bootstrapper's dream.

Along the way some walls collapse and some people get food poisoning, but this place is changing at a astronomical rate. You can't contain it