The Chinese (and, I guess, Indian) education system isn't bad because they use performance on a test to assign students to universities. They're bad because they lack the resources to provide a top-notch education to everyone, so only the best students get to enjoy one. At the best Chinese universities, professors with a diverse international background give their students plenty of nuts to crack by doing some thinking on their own, and having some basic facts memorized seems to be more helpful than harmful for that. At the worst Chinese universities, the professors themselves may be unable to do better than just regurgitating the textbook. I expect overall quality to slowly rise over the coming decades as an increasing number of well-educated graduates become educators themselves.
They don't test merit either (perhaps some students would do better after a remedial programme) and are still prone to corruption.