I think you're wrong about the incarceration rate though, by a lot. China has an official prison pop. of about 1.5 million, to have a rate close to what the US does it'd need to have 7.5 million [1] people in the internment camps, which AFAICT is way higher than anyone estimates (I couldn't really find any good estimates, but for scale the total population of Uyghurs in China is 11 - 15 million)
[1]
(def us-pop 325719178)
(def us-prison 2121600)
(def china-pop 1403500365)
(def china-prison 1649804)
(defn rate [prison population] (float (* 100000 (/ prison population))))
(rate us-prison us-pop) ;=> ~651
(rate china-prison china-pop) ;=> ~117
(rate (+ china-prison 7.5e6) china-pop) ;=> ~651
Note, however, that none of those speculations is in any way meant to excuse the incarceration rate of the U.S., which is an exceptionally outrageous state of affairs. It also goes to show that using incarceration as a tool of social engineering is by no means the sole province of totalitarian systems of governance.
Your speculations about China sound about right to me, but as a European looking in from the outside, any time someone talks about how much freer Americans are it scares the shit out of me. The US might be the domestically freest of the global superpowers, but that doesn't mean it's any good, it just means the bar is set _really_ low.
I would also note that even including all of the damning things you list, the U.S. on average falls behind most rich democracies in the world, but is still far ahead of most other states, except in the incarceration rate [1]. Rich democracies are an outlier.
[1] I'm not sure that's quite true any more if you count in all the Chinese internment camps and other non-disclosed facilities - the U.S. never had secret prisons at scale, other states do.