The PRC has a socialist market economy. The working classes control the state, and the large firms, key industries, finance sector, are all dominated by public ownership. Public ownership is the principle aspect of China's economy. State capitalism as a term more fits the Republic of Korea, where the state is controlled by capitalists and private ownership dominates the economy, but with heavy state influence.

Where are you getting your ideas about communism from that leads you to believe that China isn't building towards communism? Roland Boer's Socialism with Chinese Characteristics: A Guide for Foreigners is a great place to start with learning about China's socialist system.