The first thing I would try is to take the entire sprocket cover, with the clutch arm, off, and take out the piece that goes in the hole that actually engages the clutch. See if it works like that, if it grabs (you just won't be able to release the clutch in this state) then the problem is in your linkage, it's the cable or the arm out of adjustment, somehow. But if it still slips, than the problem is the clutch itself. Process of elimination is the only sure way of diagnosis.
And here is one more thing. When I first got my engine, I seen some guy on youtube complain that the screw that holds the pinion gear on was loose on his from the factory. So I checked mine, and sure enough, it was loose, too, almost to the point of falling out. In fact, when I took the cover off, it did fall out. I don't think there is a Mandarin word for "loctite".