I agree that the incentives behind "publish or perish" are quite problematic. However, this does not seem equivalent to directly earning cold hard cash for each individual paper.
I don't see what's so magical about cold hard cash compared to other economic incentives that eventually translate to cash too.
In any Western university there's people fighting for tenure, which tends to hinge on publishing high-impact papers. This is an enormous economic incentive. The difference between getting tenure or having to leave academia and starting an industry career at a disadvantage can be measured in dollars, and it's large. In fact, even without measuring anything, I think it's quite clear that the overwhelming majority of people in this situation would take tenure over a $10K cheque. So it's disingenous to say that the Chinese incentivize publishing more because they pay cash.
If anything I find that the system of paying cash is more transparent, and it may be somewhat more balanced than others. For example, in Spain people fighting for tenure have a very large incentive for the reason mentioned above (and a PhD has zero or even negative value for most industry job offers here, so the value of the incentive is really huge). Youngish tenured professors have a not so large, but significant incentive (there are salary supplements one can get linked to journal publishing in 6-year periods. They are not too large -around €100/mo- but each one you get is for life, so for professors in their 30s we can be talking about more than 30K for publishing a few papers. This is pretty much cash for papers too, but no one bats an eye because we are Western, I guess). A full professor 5-10 years away from retirement has practically no incentive at all, by the time they can get another of these supplements they will be retired or almost retired so they won't get much, if anything. So it is quite common to see professors in this situation just not doing research at all. The distribution of incentives would be more uniform with cash.
To sum up, I think the outrage many people in the West express about Chinese universities paying for papers is pure hypocrisy. Either giving economic incentives to paper publishing is a good idea or it isn't. If it is, I don't see anything wrong with the incentive being cash, and if it isn't, we should probably criticise our own systems as much as the Chinese's.
Eventually, I think the criticism of the Chinese way boils down to prejudice. The whole mysticism about cash is an excuse to not say "incentivizing publication in the West is good because we are going to publish good papers, incentivizing publication in China is bad because they are dishonest and are going to churn out lots of crap if they are incentivized to publish".
