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They're socialist in who runs the country and how they run it

I don't think a reasonable person can watch the difference in how they handled covid compared to truly capitalist countries and come away with this confusion. The capitalist class is not dominant in China.

China is Socialist, in that it maintains a Dictatorship of the Proletariat, and is progressing towards full Socialization of the economy. The Dengist liberal reforms occured after Mao's Great Leap Forward backfired, Mao put too strong of an emphasis on the idea of Class Struggle. As Engels puts it in Principles of Communism:

"Will it be possible for private property to be abolished at one stroke? No, no more than existing forces of production can at one stroke be multiplied to the extent necessary for the creation of a communal society. In all probability, the proletarian revolution will transform existing society gradually and will be able to abolish private property only when the means of production are available in sufficient quantity.”

Xu Hongzhi and Qin Xuan elaborate on the decisions made in implementing liberal reforms as a part of "Socialism with Chinese Characteristics," specifically with respect to errors made under Mao in trying to "skip ahead to Communism:"

“Due to the hasty and early entry into socialism, we didn’t accumulate enough experience to enable us to have a very clear understanding on the issues of social development. Throughout the ‘Great Leap Forward’ and the People’s Commune Movement in 1958, there had occurred a blind optimism of targeting ‘the realization of communism in our country, which is no longer a distant future’, and thus made a serious and erroneous estimation on the development stages of socialism…. As Deng Xiaoping pointed out: As early as the second half of 1957 we began to make ‘Left’ mistakes. To put it briefly, we pursued a closed-door policy in foreign affairs and took class struggle as the central task at home no attempt was made to expand the productive forces, and the policies we formulated were too ambitious for the primary stage of socialism. After the 3rd Plenary Session of the Party, after the comparison of our both positive and negative experiences, the Chinese Communist Party has gradually made a scientific conclusion that China is in and will be in the Primary stage of socialism.”

Whether or not the CPC has their bourgeois class reigned in or not, whether the Bourgeoisie in China is in control or the people via the CPC, these are genuine concerns that we can have, but the central idea that "having Capitalism means the entire system within context is Capitalist" is wrong. What matters is trajectory and control.

The clear distinction is hard, I accept that point. The phases at least how I learned it are clear. First state owned then truly society owned as a goal. They never got anywhere near that. Nor a classless society. It wasn't the old classes from before 1900 but classes as in power structures were very much present.

This is a bit confused. The USSR did eventually form a Beaurocratic section over time, especially towards the 80s until its dissolution, but to call it a "class" is not quite accurate. In The State and Revolution, Lenin does a good job of explaining what even constitutes a State, in explaining the economic basis for the "withering away of the State." The Soviet model functioned like this graphic:

Again, I am not arguing against or for communism, just making the argument that there was never a communist country as in the sense they reached something resembling the idea of the word. Keeping in mind that there is not a clear line of demarcation, this much is clear to me.

Again, though, this isn't what people are saying. The doctrine of the USSR was Communist. They were working towards Communism. The fact that they did not reach that point does not mean their ideology was not Communist.