Surprisingly, China has lifted some 800 million people from poverty so it does happen. I'm not a communist and wouldn't prefer a communist country but I've gotta give credit where it's due.
That only happened after it embraced the free market and capitalism though. Communist China was, as you say, quite poor for decades.
Capitalism can take many forms and is often tempered with more socialist policies. No country – including the United States" is "pure capitalist". China has its own spin on capitalism, but that doesn't make it not-capitalism.
Communist governance of assimilated subjects is about the opposite of democratic governance over diverse states' free citizens.
Communist economies are about the opposite of free enterprise.
Capitalism is its own purely economic animal, perhaps directly opposed to a communist economy, but not the opposite of a communist government.
Really capitalism is not conceptully supposed to be a form of government to begin with, but it can snuggle up to any government from democracy to communism to monarchy and anything in between.
And there you go.
As an "ism" capitalism has been with us since prehistoric times, any actual governance it accomplishes is effectively done by the different types of political systems it has operated with, that have come and gone over the millennia.
Sometimes the strength of the capital is greater than the resources or political will of the government in power at the time, sometimes not. Debt can distort this balance.
I mostly agree with you on this, although I do think in the case of modern China to be intellectually honest one has to be careful to not attribute all the good things to capitalism and all the bad things to communism.
Capitalism can take many forms and is often tempered with more socialist policies. No country – including the United States" is "pure capitalist". China has its own spin on capitalism, but that doesn't make it not-capitalism.