XP, I tend to agree with you!
It is difficult to look at China from a logical, Western perspective. There's a completely different system of right and wrong here. Rules (traffic rules/ ways of doing business / contract law & intellectual property rights etc) seem flexible to the point where people tend to grab what they can just struggling to make ends meet. Connections and corruption are seen as a way of getting what one wants.
Pirated DVDs are illegal yet I often see police buying them. Prostitution is illegal, yet it's not uncommon to see shops in the same street as a police station. Selling clothes/food on the street is illegal (the government receives no tax from it) yet millions of people earn a living from it each day. The problem: a huge, largely unskilled workforce. A government that knows if it shuts-down these industries it will need to provide millions of more pointless cleaning/security jobs which often pay around Y1,000 a month to avoid having a large idle, dissatisfied, hungry group of people wanting change.
My point is that criticism of corruption, inefficiency in government, government inaction regarding pollution, traffic etc is ok. Criticism of the system of government is not ok. It's just the way it is in China. Not right or wrong. As a foreigner you will be largely immune to it. Nobody will tap your phone (I hope!) or follow you around. The government largely doesn't care what foreigners do or talk about amongst themselves. Provided you're not a do-gooder looking to force your preferred system of government onto China, your mongering, jaywalking, tax avoidence while teaching English etc will be ignored. Involve yourself in Chinese politics / public discussions on Xianjiang Province / freedom of the press / religions issues and you're likely to run into trouble. For 99.9% of Chinese people and foreigners if you mind your own business government involvement in your life won't be problem.
Do I like communism? Nope. I reckon it's inefficient and doesn't work. But it's not my place to tell the Chinese what system of government to have.