[einpoklum]

1. Intellectual Property is not about "allocation of resources". IP is not physical property (which is a separate question). IP is the threat of punishment for using or copying information.

2. The Chinese economy actually has plenty of IP restrictions (e.g. Huawei is very keen on patents); and China is a signatory to the Berne convention. Some Chinese corporations may have failed to observe it, but this is not legal.

3. How would specialist tools get created? Depends on whether the economy is more Capitalist or less so. Maybe large corporations need those tools and will put money into consortia which produce them. Maybe there are lots of small organizations, public/state organs, and/or individual artisans/professionals which need them - so either they pool resources, or the government funds such projects. If the economy is not money-based, then it's a different kettle of fish.