While most of the above is ease to agree with, there is this uneasy feeling that one could change "two parties" to "one", and use it in a Chinese context. Which would also hold true, after all there's nothing wrong with a single party system as long as it is democratic and consists of a wide spectrum of political ideology?

Well, in practice there kind of is. It probably doesn't have to be that way, but just from what little experience I have, I wouldn't hesitate which one I'd rather live in. The more heterogeneous system tends to bring a more heterogeneous culture and with it a wider range of ideas.