Capitalism, especially introduction of capitalism, can't come about without vigorous repression. The history of any country attests to this fact. If China becomes a relatively prosperous capitalist country (and it has this chance -- temporary prosperity it may be -- unlike, say, Nicaragua), it will probably move toward moderate repression (the kind that, say, Japan has). Utter chaos might come about anyhow, if one day the CP comes to be seen as "unable to deliver" (which may be soon if Asia doesn't recover and China gets dragged down with its neighbors' problems, for example). As of now, however, China isn't "Russia" or "Yugoslavia," China is also better than India or South Africa, and there is much to be said for that (not in terms of political power of the masses but in terms of the CP's ability to navigate the entry into the world market without total disintegration of the country). The Chinese masses -- including women -- seem relatively well fed & literate. Only true elitists would dismiss this relative achievement as nothing.
Of course, there are other options (and I can come up with any number of them in my utopian imagination), "theoretically," but an objective look at China doesn't reveal the existence of organized social forces of significant size ready to carry out, nay even demand, socialist alternatives (and such social forces, should they emerge, must have the strength to overthrow the present regime while at the same time resisting imperialist attacks or attempts at cooptation, or else it would only end up paving the road to hell, as, for instance, the Polish Solidarity did). So, the only consolation for us now is that China seems blessed with smart & nationalist technocrats (some of them even with a sentimental attachment to the name of socialism, like Henry's friends), as opposed to purely egoistic imperial technocrats (the kind that the West sent to the ex-Eastern Bloc) who reduced numerous countries to neocolonies for the sake of quick plunder.
In any case, we are not in a position to tell what China should be doing, since we have been unable to get any kind of socialism going here, in Japan, in Australia, or in any countries from which LBO-talkers hail (if we are so smart & know-it-all, why can't we?). The first-world socialists have not been able to even stop imperialist attacks on any country that ever attempted socialist revolution either. If we had been able to do either of the above, the Chinese masses would have had, and would have now. "other options."
>And why did China follow the first path and Russia the second?
I have no idea (though, off the top of my head, I'd say China, even when it was socialist, had the most pragmatic of the Marxist thinkers as its leader). You tell me. Or maybe Steve Philion can.