> How does China incentivize its executives to spend money on redundancy?

IMHO, China has two parallel hierarchies of status - one in the ruling party, other in private sector. So the ruling party can maintain the capitalist competition, and dictate overall industrial policy, which fuels the innovation.

In the West, the rich people owning capital captured the political class, so there is only one status hierarchy now - of capitalists. This hierarchy ossifies and becomes increasingly resistant to competition - why invest into something new when it will most likely cause your individual wealth to decrease?

I think this manifests as the wealthy class increasingly speculating on the rising price of assets and extracting rents from them, rather investing in productive infrastructure. So the neoliberalism (capitalism) is in a sort of tragedy of commons, where wealthy individuals benefit more from this financialization rather than actual production.

The West avoided this in the past by having strong unions and middle class controlling the policy through democracy, which balanced the accumulation of wealth. If China can in the future avoid this (or other) trap, where the status elite ossifies and prevents investment in the interest of whole society, remains to be seen.