Yes, I think generally medium-sized countries make more sense than giant ones, for many reasons. Though even the U.S. can do central planning when it wants to—the interstate highway system is an example.

As for China, we'll see. It's a huge country that I think would be chaotic under just about any system, but their current vaguely mercantalist, sort-of centrally planned quasi-capitalism is doing reasonably well, producing strong economic growth— with its attendant social problems. Would a fully market-oriented economy without the strong role of the state work better? I don't honestly know. I don't know how you'd even go about testing that kind of counterfactual.