I think this is a bit reductive of what socialism is as well as what it opposes. The problem with capitalist states isn't principally that they have markets, but that the rich control society. The purpose of the dictatorship of the proletariat -- the concrete goal of socialism -- is democracy, which includes being rid of that control. Perhaps China is compromised, perhaps it is not, but we shouldn't pin it on them dealing in trade like it cosmically taints them with anticommunist sin. It would be more like they played with fire to further their goals and failed to contain the fire, that being if we assume it is true they are compromised.

In that sense, if we accept "capitalism" to mean "using markets" (which I don't think is right but w/e) then it would be more appropriate to say that socialism opposes liberalism, the political-economic paradigm in which owning markets means owning everything else by extension.