China has only just started embracing capitalism and market-based economics, it's definitely too early to call quits and believe that China's political system will not change. It's a huge country, the effects of capitalism will trickle down slowly and occassionally it may still hiccup, but it's naive to say that capitalism since the 80s has not transformed China. In the span of a mere decade, there is already more than just a Hong Kong being the thorn now, Mainland Chinese cities like Shanghai are also becoming as capitalistic and open as ever.
See this set of recent photos of Shanghai: http://www.militaryphotos.net/forums/showthread.php?t=85517
China and its economy are not the problem. The problem is with its dictatorial leaders. I am sure most of us still remember The Square. Chinese people have been hard working and productive for thousands of years. They built The Wall to keep barbaric hordes out. Some believe the Wall eventually drove the Hun and later Mongolian hordes west. Their Wall was the perfect defense against Horse Arching Hordes that could ride all day long. The West would later learn that they had no such defense.