Must of the frustration that western countries are facing in China is similar to the same problems that companies faced in Malaysia in the 1970s with Malaysia's Bumiputera laws. These laws required all international companies in Malaysia retain a certain percentage of Malaysian Malay ownership in-order to operate. Likewise, many government projects and investments were limited to Malay-majority-owned companies. Chinese, Non-Muslim Malays and Indian Malaysians were given few benefits under the new laws.
At first these changes had little effect on the booming Malaysian economy - labor costs were low, natural resources abundant and the government was pro-foreign investment as long as the companies played by Malaysia's rules. Then in the 1990s things started to change. Other countries in Asia became cost-competitive and Malaysia experienced the beginning of a serious brain-drain as many professional Indian and Chinese Malaysians left the unbalanced economy for more fair playing fields like Singapore, Australia and Hong Kong. 
Ironically, the Malaysia government responded much as China seems to be responding to new-found wealth and fast-paced development, seeing it as an excuse to implement more policies that favor domestic companies and protect local markets. Fast-forward to today and the Malaysian economy has stagnated. Foreign investments in Malaysia have declined year on year since the 1990s and many Malaysians feel that development of the country has stagnated. While the Malaysian government implements meaningless policies to pander to extremist groups and continues to suffer from rampant graft, the economy continues to slow. Only now more than 30 years after Bumiputera started is the government starting to reconsider its choices.
China now runs this same risk. The cheap labor, raw materials of china are easy for many developing countries to mimic and many do a much better job than china at ensuring intellectual property rights. The size of China's domestic market makes it a very appealing place to do business, but only if foreign companies have a chance at success. By continuing to be so restrictive even as the country develops, China risks following in Malaysia's footsteps. The hard truth of globalism is that no country is irreplaceable in the international economy.
First Image: KLCC, KL, Malaysia - http://su.ntu.edu.sg/ICTF/index.php?q=node/15
Second Image: Shanghai Towers (2014) - http://www.interiordesign.net/article/CA6619307.html
