It's not really much different from the US. There are a few elite universities that have very competitive admissions and then a bunch of second-rate local universities (although the elite universities in China are about the same level as second-rate universities in the US). The problem is that university admissions in China is decided entirely based on a single test. You basically get one shot. If you don't do well, that's it for you (unless you have rich parents that can send you to the US to study).