Strange, too general statement, in Nazigermany capitalism lead to a strengthening not of democracy, but fascism.
But i agree on your line about hypocrisy.
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However, a war between these two would predominanantly be a cyberwar and a naval war.
In the cyber-arena, I am certain that China does not let us know what it is capable of, but I am sure it is capable of more than we know. I do not rule out that it could if not knock out the US homeland then at least do signficant damage to civilian and critical infrastructure: traffic, energy, hospitals, industry, communication.
In the naval arena, the closer to China the battles take place, the more the balance shifts in China's favour: missiles, submarines, and simply: numbers. I do not naturally assume anymore that the US navy can hold it's ground in the regions of most likely disputes.
China may not like but can take high losses in lives. America can not. And China probably would fight from a position of numerical superiority - with more and more modern, advanced technology. And while the American army currently may be " battle-hardened", it is also battle-weary, and certainly the US society is also. Not to mention that a war like that costs money. Say, which country is set up better, financially? The one has debts equalling its yearly GDP and loosing global trust, the other does not know where to invest its surplus, and is seen as one of the rising currencies?