My own explanation is this - it is like why people don't upgrade to the latest operating system, a large percentage of people in the world (30%!) are still on Windows XP!
It is because they are so used to the way it works, and people have refined and became so efficient at operating it, there is little incentive to upgrade to a costly new operating system that may perform worse than Windows XP (Vista remember? Windows 8 remember?). So people stopped upgrading and stucked at the old operating system.
And China is like that for a while.
I strongly disagree with the last sentence - China may have been like that for its existence prior to the mid 19th century, but during most of the 20th century (which was chaos and then initial reform) and the last couple of decades (early 21st century and very late 20th century) the need to innovate and reform has been well accepted by most of the population. Simply knowing that there are better ways of doing things (such as seeing developed countries of the world with high tech industries and efficient methods of production) has been enough to instill the fact in for the majority of the populace.
I think you got this very very wrong. The crucial difference is that China is not a democracy, no matter how you may think Chinese government is "working hard to rid of the inequality" and corruption, it is still not a democracy. Power that are not elected by the people, being centralized to just a few people with no check or balance and no one to question them breeds corruption. It is a reason why there are so many "tigers" (corrupt officials) in China, many stolen billions from the country and moved oversea.
China's current political system breeds people like
there is no way for common people to dispose of a corrupt leader whose power is absolute.
On the other hand, democracy enable the system to have change, a system where people can change the course and direction of the whole country, dispose and prosecute corrupt politicans when courts (appointed by the said politican) can't; and get rid of incompetent public servants.
There will come a time very soon that China will face critical problem it can't solve because the power that be does not want to change, and there is no one who can challenge that.
I have a few issues with what you said.
First of all, it seems to me that you are equating inequality with corruption, which isn't necessarily true. Inequality is the cause of many things, including specific social policies, specific taxation policies, the economic structure of a nation, and yes, government corruption. The point here, is that corruption is only one contributor to inequality.
Second of all, corruption comes in different forms in different types of political systems, where some may be tolerated and some may not. In many liberal democracies corporate lobbying is accepted as a way of life and not considered corruption, whereas in China many forms of such lobbying may be considered corruption. The point here, is that corruption also exists in democratic political systems and it would be naive to believe that if China were democratic then everything would be much better in this regard. Someof the world's most corrupt countries (some of which may also be very unequal) are democratic.
Third of all, you are assuming that a democracy means a government would always be more responsive to its populace than a government which in an autocracy, and that a democratic government will naturally be able to "change" to match the needs of its populace in a more effective way than an autocracy. This is also not necessarily true.
So what do these three points mean in regards to China?
Well point one relates to China in the sense that yes, corruption has definitely been a contributing factor to the current inequality in the country but other policies and the rapid economic growth of the past few decades have enabled corruption to exist. Therefore, I think it is incorrect to assume that simply removing "corruption" (depending on what definition one uses) will somehow make inequality go away.
Point two relates to China in the sense that simply dismissing China's "inability" to truly tackle corruption is false, because corruption is not a dichotomy, rather it is a continuum. Corruption always exists, the question is how much it can be reduced by.
Point three relates to China in the sense that simply assuming that if China were a democracy then inequality would go away is also incorrect, because as I said, some of the most unequal nations on the planet are indeed run by democratic political systems. There is also a question as to how corruption and lobbying, lack of education of a populace, private control of government through media manipulation, and public engagement with politics due to existing social institutions, could hamper the optimal the democratic process which could reduce its responsiveness to what the people may desire.
What plawolf seems to be suggesting in regards to the central government's willingness to tackle inequality is that the central government knows if inequality rises to unacceptably high levels then there will be a risk of significant discontent and thus the government has a strong motivation to expend substantial political capital to do its best to reduce inequality.
Now, I'm not saying that an autocracy is necessarily better or as good as a democracy in responding to certain issues -- far from it.
However, what I am saying is that your broad strokes in using absolutes to describe the ability for China (or any other autocratic or democratic government for a nation) to deal with certain issues is not well reasoned, because you are using words like "can" and "cannot" which suggests a dichotomous ability in achieving something, instead of portraying something in the context of a continuum which would be a far more accurate method of describing it.
For instance, it would be incorrect to say if a government "can" remove inequality, it is about "how much" can a government reduce inequality by.
In the same way, it would be incorrect to say if a government "can" remove to corruption, it is about "how much" can a government reduce corruption by.
Finally, you ultimately seem to be implying the government would be unable to reduce inequality, corruption, or respond to people's needs to such a degree that would present a threat to the population's acceptance of the government, and that is something which we simply cannot know.