Kozzle is correct....in a sense - in terms of its export sophistication index, China doesn't compare to the likes of Japan/US etc.

In any case, eventually environmental degradation eventually has to affect profit levels (agricultural output in China is tipped to decrease by 10% or something like that by 2050) so I see no reason why counter-measures should fall outside normal incentive-based development.

Oh, and the midway point between Capitalism and Socialism is usually referred to as the Third Way - championed by the likes of Tony Blair, Bill Clinton etc.