In fairness, China's rulers haven't hung their free-market economists from the politburo's balcony (at least not recently). In fact, they've listened to them. China has, however, murdered tens of millions of its own people, a fact that doesn't seem to bother Friedman much at all. Indeed, he speaks often of his "envy" for China's ability to pursue "optimal policies," whereas because of America's inefficient democracy, we can only pursue "sub-optimal" ones.
What is remarkable, however, is what unites China and Japan. As the editors of the Wall Street Journal (who've been shellacking Japanophiles for 30 years in these debates) recently noted, Japan's economic rise coincided with a small government sector, and its economic fall has coincided with the growth of government. In 1984, in terms of spending and taxing, Japan had just about the smallest government of the top 23 developed countries. Since the early 1990s, when its "lost decade" began, it has pursued a massive Keynesian spending spree and the government has grown to European levels.
China followed the opposite path. Starting from the abject poverty only doctrinaire Communism and feudalism can create, it has imposed market-based reforms, lifting hundreds of millions out of economic squalor. And yet the Friedman and Fallows crowd looks at both examples and bizarrely concludes that the secret to success is more statism, and the source of failure is more freedom.
China still has enormous problems, many of which aren't reflected in its GDP growth rates, and without democracy, a free press and the rule of law, we can't know what all of the problems are until they explode (and neither can the Chinese).
But all of this misses the most important point. Economic "competitiveness" is a con. It assumes that when other countries prosper, America loses. That's nonsense. If the average Chinese worker were as rich as the average Japanese worker, it would be an economic windfall for the United States. Conversely, if China's economy imploded tomorrow, we would "gain" competitively but suffer economically. The cult of competitiveness is just a ruse used to justify the ambitions of economic planners and the pundits who worship them.