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Honestly I think it is inaccurate to even call it a people's democratic dictatorship; the influence of capital isn't zero. It's less than other countries, but for example, Cuba is a much better example of a place where the people have dictatorial control over policy.
I think any discussion about China being a democracy or a dictatorship can't work at all if you can't figure out the definitions communists use.
Like "China says they are a dictatorship, so they can't be a democracy", but communists define every single government as a dictatorship, only changing what social class is in power, so what even is the point on nitpicking a word that for them just means "well, there is a government here"?
As for "democracy", I don't know if communists have another definition for it, but if you want a government where "power is held by the people" and you believe that every government is a dictatorship, then the only option of a democratic government you get is a "dictatorship of the people".
Correct, literally the more power capital has, the less power the people have. This isn't just power within the government, since any power the capitalists are allowed to exercise is an extension of the government enabling it.
China does get some utility from the capitalist class; their national bourgeoisie, who can be controlled somewhat, has helped develop the means of production without totally selling out to foreign bourgeoisie, who can't be controlled at all. One of the stars on the Chinese flag is for the national bourgeoisie.
It remains to be seen whether they were right or this turns out to be some class collaborationist horseshit.