The argument is essentially that China's economy doesn't function as a proper market economy. That too much of its economy is directly governed by State controlled or owned corporations. That prices in its economy don't function enough based on market influences. An example of this would be their vast dumping of steel and some other industrial products, while their government continues to directly subsidize the dramatic over-production despite large losses in the steel industry.
http://www.reuters.com/article/us-china-usa-trade-idUSKCN0ZU...
http://thediplomat.com/2016/07/market-economy-status-for-chi...
The argument is essentially that China's economy doesn't function as a proper market economy. That too much of its economy is directly governed by State controlled or owned corporations. That prices in its economy don't function enough based on market influences. An example of this would be their vast dumping of steel and some other industrial products, while their government continues to directly subsidize the dramatic over-production despite large losses in the steel industry.