This is rather No True Scotsman. A lot of people say the same thing about every failed socialist state from the 20th century too. China is primarily a planned economy, and means of production are primarily controlled “by the people” (really by the central authority which claims to represent them). It has allowed a restricted level of market activity, and a restricted level of private property (though the party retains a significant level of control over said activity). The same could be said for every socialist state in history. If you follow this line of reasoning, either every nation in the history of the world is socialist, or there has never been a true socialist country. Neither of those conclusions are reasonable, obviously.
I was going to point out that there's a common phrase "Chinese capitalism" but there was never a common phrase "Soviet capitalism", but Google proved me wrong. I guess I'll defer to the judgement of people with actual economic knowledge.
If you consider the abolition of private property, and the central planning of the economy to be the core aspects of a socialist society (which is a rather uncontroversial, though incomplete definition), and the exact opposite of that to be full property rights, and full free market, then you won’t find a single organised society that fits into either of those buckets. All socialist societies throughout history have allowed for some level of property rights, and all have had some level of market economy. Conversely, any society that could be described as capitalist has had restrictions on private property (at a minimum, through taxation, though there’s lot of other ways too), and have had restrictions on free market activity (again at a minimum, through regulation). To say that any of the socialist governments that emerged in the 20th century are not truly socialist is a quintessential No True Scotsman fallacy, and the same reasoning would be equally valid for making the (equally fallacious) argument that there are no true capitalist or free market societies.
