How can an economy in which the government owns majority stakes in most of the country's largest companies (and handpicks the senior executives from the ranks of the children of senior Party members) be freer than the American economy?
You raise a good point. The Chinese obviously have problems with cronyism at the top. I have heard complaints while visiting China just as you indicate.
Counterbalancing the top cronyism is the lack of the myriad of stifling laws that we have. I think it is far easier to employ others, operate a business, and start a business provided that you are not big enough to draw attention from the local party hacks. If capitalism did not flourish in China, the economy would not have grown at such a high rate. I think there should be more regulation to deal with obvious labor and environmental problems, but even with some level of additional regulation, China has a freer economy than we do or at least that we will after the rats control the show for the next years.