a) Chinese citizens are more or less free to start a company that makes and sells widget X, and freely compete with anyone and everyone else making and selling

a) Chinese citizens are more or less free to start a company that makes and sells widget X, and freely compete with anyone and everyone else making and selling X, for almost any X. That's the free-market economy part. b) For some values of X, or for some strategic Chinese goals related to X, the Chinese government has opinions. They may ask the company to do (or refrain from doing) certain things. When this happens, the owner of the company needs to do as they're told, or bad things will happen to them. That's the amoral state calling shots part. The lines are not the traditional all-of-society-must-fall-into-one-category-or-the-other capitalism vs. communism, but the boundaries are pretty clear.