Not all of China has communes or the Soviet equivalent, but they do exist in villages and even some neighborhoods in the cities. Market economies are something socialism will do away with simply because it won't have a need for them, but since the abundance/surplus of material conditions and, primarily, the productive forces and industries necessary for a robust, socialist economy do not exist yet, they must be developed.
They're not a capitalist country since they have abolished the dictatorship of capital under the bourgeoisie that stands above the state and the working masses. This isn't to say that the capitalist/bourgeois class doesn't exist, but it's effectively living under the authority of the Communist Party, a party comprised of working and popular classes. To that end, the bourgeoisie has no political power to overthrow the revolutionary government. Under the dictatorship of the proletarian and popular classes, the bourgeoisie is allowed to exist, but only so long as it understands that they serve China, the people, and the socialist revolution.
Someone may have already mentioned this, but the Party and the central committee, in particular, especially in the previous and current 5 Year Plans, have more direct control on how enterprises are to function. Entrepreneurial autonomy has been greatly reduced and many of the industries that have reached national influence have been brought under state control, which was the ultimate goal. It's necessary to allow entrepreneurs and small bourgeois enterprisers to build up industries, especially those in their infancy, regulate them, directing their purpose, while promoting their growth. Once these industries reach the national level, then they are brought under state control and socialized.
It is of great importance that the Party, its cadres, and its members are resolute in their duty to bring about socialist and communist revolutions. The productive capabilities and achievements under capitalist economies, despite the brutality that the working masses have been historically subjected to, cannot be ignored as these are unequivocally proven to lead to the creation of surplus and expansive productive industries, which would serve as the foundations for a socialist economy.
What we've suffered, for centuries, under capitalism when it enters into an era of "crisis" would not happen under socialism, as the overproduction and surplus of commodities would not spell a disaster for the profiteer, as the profit motive and the profiteer's dictatorship would be abolished. Instead, we would experience prosperity unlike humankind has ever experienced even under capitalist periods of prosperity.
To understand our Chinese comrades' aims, we must think in the long-term and we must think of posterity and the future, beyond even our own lives. Could the path to socialism have taken a different path? Indeed, but we mustn't forget that developing Socialism with Chinese Characteristics cannot be done in a vacuum, within the confines of China's national boundaries, especially since the world it exists in is a world that has been under the vice grip of capitalist imperialism. Going from a semi-feudal nation that had just ended a decades-long civil war and foreign invasion and occupation, the imperialist threat yet remained. It was imperative that industries take root as quickly as possible, as the main enemy to socialist revolution were nations that already had strong, industrial bases and militaries. This pressing necessity is the reason why, in under 80 years, China was able to become a nation of moderate wealth, rivaling that of its Western, capitalist counterparts. Without the threat of Western capitalist imperialism poking, prodding, and provoking at every turn, the development towards socialism would've likely taken a far more different character, likely, utilizing an economic model that did away with systems used under capitalism.