I've always found Li to be a blowhard and apologist, to be frank, with his "meritocracy" claims. It stinks of being a nice convenient justification/explanation for Chinese economic growth since 1978. There was certainly nothing "meritocratic" about the CCP before 1978 (obviously). What changed was desperation over a failing system and so hence a willingness to abandon a failed entirely state-owned model--laudable, but hardly proof of a kickass meritocratic party.

The fact is that from 1978 until about 2010, the incentives of the CCP elite (once freed from communist ideology and free to pursue unlimited wealth) aligned with that of the population--the CCP elite could get rich owning profit-seeking SOE's, and they had destroyed the economy to such an extent by 1978 that massive opportunities were everywhere even for super inefficient SOE's (and obviously the worst of them were dismantled in roughly 50% of industries/GDP).

But now that the country no longer needs massive investment from horribly inefficient SOE's, there's no need for them--this is rebalancing. So the test is, will the CCP be willing to give up its power and privilege for the benefit of all Chinese? Human nature and history say no, of course not (and obviously this isn't happening under Xi, quite the opposite). The advantage of the Western model is that the non-elite at least have some means to fight the natural tendency among the elite to concentrate power and privilege in their hands. This to me is the right paradigm to look at politics and economics--human nature is pretty selfish, and so lots of safeguards are needed.