Most who say China isn’t socialist are just moralists who believe in socialism because they believe “private property is morally wrong.” Scientific arguments are contextual, they depend upon certain economic conditions which justify the economic basis of the policy, and so Marx’s arguments in favor of nationalization requires that the conditions under which he made the argument for are met (primarily that the enterprises are already “socialized,” i.e. very large centralized enterprises).

Moral arguments are non-contextual. If private property should be abolished because it is morally bad, then the concept of a sector of the economy being too underdeveloped for nationalization makes no sense, since for moralists the economic conditions on the ground have nothing to do with it, it is a universal eternal moral principle. They thus equate socialism to the immediate outlawing of all private enterprise regardless of economic conditions and anything that falls short of that is deemed to have abandoned “true” socialism, and so they see the claim that China is capitalist as “obvious” because there still exists private enterprises.

The argument they present regarding the USSR is usually different and is just predicated on their belief that the USSR was not a democracy. Socialism is not just nationalization as nationalization in an undemocratic system is still private enterprise by definition. These people grow up in a propaganda environment that makes the USSR seem like Nazi Germany to them so they have a hard time accepting that the USSR was democratic at all; it’s “obvious” to them that it wasn’t even without researching it or even knowing how its system worked just because it’s what they have always heard.