The truth is you only need look at Chinese "communist" Party documents, including Mao going back to the post-1949 Revolution period to see that in fact that state capitalism is what it's always been:

Mao: State capitalism on Building the Economy- Conference on Financial and Economic Framework 1953

It seems the only major difference now is that it has been made more liberalized and dynamic than the closed economic nationalism of the Maoist era.

China: state capitalism to private capitalism 2003

In Europe, state capitalism became more significant, as with state-owned services and businesses, in the late 1800s in Europe, denounced by Marx and Engels in Socialism: Utopian and Scientific as at best a compromise in the public interest; at worst totalitarianism and fraud.

But it really took off with the consolidation of state bureaucratic cliques in Russia after the 1917 Revolution in accordance with the supposedly transitional state capitalist policies of the first Bolshevik government:

Lenin: Industrial Management under a State Capitalist Monopoly Framework

Progress Publishers, Moscow; Lenin: State Capitalism During the Transition to Socialism (Index)

Lenin and Bukharin on the Transition from Capitalism to Socialism

The rise of Stalinism, of course, made that "transitional" policy more of less permanent (by mostly brute force and oppression).

As for China, the only part of its economy that can really be described even remotely accurately as communist or even socialist is its huge cooperative/commune movement.

Perhaps this is what China needs more of. We see that in Scandinavia and other European countries, where there is a greater degree of practical socialism (as in cooperatives, labour-sponsored ventures, community-based business and similar democratic economic development), there is a higher standards of living, greater personal and social freedom and greater opportunity and stability.

http://progressive-economics.ca/