I think that point would have some merit if US, EU and China worked completely in isolation at every level. Let everybody sort their mess like they want. But clearly that's not the case, China's economy is very tightly linked to ours, as such the way we trade with them influences their internal politics. When a US or EU company moves production to China it's not politically neutral, this company implicitly endorses the Chinese political system. As such I don't see why we couldn't regulate these things to suit our principles and interests.

It's not about saying "stop censoring the internet or we'll nuke you", it's about saying "if you want to do business with us we demand that you meet these standards, otherwise no biggy, we'll just go elsewhere."

And China does attempt to do the same thing, for instance in many African countries. It's less obvious because they're still ramping up their diplomacy, US and EU have a huge headstart there.