The dragons own Xiyatu, it is their domain. Not in a legal sense, there are no pieces of papers or contracts which unambiguously state their claim. Yet their serfs comprise the Central Committee, their serfs own the State Industries, their serfs command the military, and their serfs lead the most prominent shadow warrior schools and magus traditions.
Depending on your view of serfdom, the Greats don’t even rule the city directly. Their serfs (and the bureaucracies they control) govern the city, in the dragons’ name. The Greats provide guidance, broad policy and goals, but don’t micromanage. Enserfment ensures obedience, so there is no need.
The city is no longer communist to any recognizable degree. In fact, when compared to most of the Fed, Xiyatu is among the most capitalistic polity in North America. New businesses can easily be licensed, there are no restrictions against competing with State Industries, and other than the requirement that all contracts be in Standard Chinese (a dialect of Mandarin called Putonghua), there are no official restrictions on hiring. (Discrimination against yangui and Beyonders is cultural, not statutory.)
Xiyatu is not democratic, however. There are no elections, all government positions are assigned on the basis of rigorous testing. (The Party structure exists now as a mere formality, it has no influence on governance.)
The city-state is very prosperous, the richest polity in North America. The wealth of individual citizens varies greatly. There are dirt poor yangui and Beyonders, and slightly-less-poor Chinese peasant laborers. There is a small, but growing merchant class (grocers, tailors, cobblers, and so forth), and, of course, the wealthy — CEO’s, government officials, and so forth.
Xiyatu is not a police state, or authoritarian state. (There is no widespread police surveillance or informant network, for instance, and no Secret Police.) In form, it most closely resembles an absolutist monarchical oligarchy — theoretical total power vested in the Central Committee, said powers being delegated to subordinate bureaucrats, appointed by testing, not the committee.
There are a list of common rights guaranteed to citizens, rights the government (for the most part) respects. Citizens are generally free from arbitrary arrest and imprisonment, have the right to counsel, and so forth.
The city has a large and aggressive police force, and harsh penalties for even the most minor infractions. (Bureaucratic corruption and nepotism are, in particular, harshly punished.) Its legal system is, no pun intended, draconian. Even so, the recent increase in population has placed a great strain on the police force, and crime has been steadily rising for the last 10 years. (As always, the key is to not get caught.)
There is a strong organized crime presence in the city, including Asian Triads and American-grown Tong. Street gangs are also a significant problem, especially in the yang and Beyonder ghettoes. (Shadow warriors are aggressively recruited by gangs, and the most prominent have their own warrior schools.)
In many cases gangs have infiltrated the police forces, or have recruited official patrons. Xiyatu has a dedicated organized crime unit, but it is notoriously inefficient and corrupt.
Xiyatu suffers from Emergences and nomadic gangs, as all North American polities do. As is common, their border is, in many cases, a formality, violated at will by nomadic packs and gangs. The further from the city and Mt. Rainier, the more tenuous their rule.
Vortexes are dealt with aggressively. The city has a standing bounty for reporting a new vortex, and an even higher bounty for scouting one. They also offer contracts for closing a vortex. In extremis, the dragons go vortex-jumping themselves.
Rumors have it that there’s a massive vortex in the Rainier lair, that leads to Dradhakh (the dragon continent in the Beyond). This is likely only a rumor, but it is true that they have a large number of Khadach (humanoid draconic hexapeds) protecting the lair, Khadach who have been trained to use specially modified Type 56 rifles (an AK variant) and who wear tailored Teijin armor (a Kevlar clone, manufactured in Japan). The dragons are well protected in their tunnels.