> Just getting a business license in China takes a bribe and months of red stamping.

Do you have any evidence of this? From my time in china, I see a massive entrepreneur spirit. In fact everyone I spoke to was starting a business of some kind.

What colour stamps do you use in the U.S? Are they somehow superior to red ones?

> Innovation is crushed in China mainly because of the IP laws (or ignoring thereof.)

Any evidence of that as well? I would 'guess' that it is more related to the fact that there is so much low hanging fruit in the chinese economy right now, that innovation just isn't required to run a successful business.