State capitalism is really a misnomer, if not an oxymoron. Capitalism is defined by relations of property/production, in which individuals or groups are entitled to own the means of production, and by extension commercial property. This ownership is sanctioned and guaranteed by the state. If the state does not sanction and guarantee this kind of ownership but instead entitles itself to monopolistic ownership over production and property (as existed in the USSR) then capitalism, for all intents and purposes, does not exist. Private ownership of the means of production is the hallmark of capitalism. That said, these catagories are not black and white. However, the more private ownership of production you have, and the more this private ownership is enshrined in law, the more quintessentially the society can be described as capitalist.
In light of this, China, with its burgeoning private economy, is best understood as a country in transition from socialism to capitalism, not from state socialism to state capitalism.