You had the Church vying against various pre-modern states for political power, and in the shuffle there were also entire towns and regions that had de facto autonomy, as well as guilds and other medieval institutions that were allowed to mind their own business.
In that vigorous competitive environment, you would expect that cleaner, less corrupt, and more transparent institutions would tend to survive. The way these institutions worked were aggressively copied across Europe, as nations vigorously competed with one another to modernize and survive.
In that framework, you would see Communism as a big step back -- instead of clean, independent institutions on the 'Western' model, just replace everything with the state.
China, on the other hand, was basically still a pre-modern state into the 20th century, and hadn't had non-corrupt institutions since the mid Qing dynasty. Pre-modern China had no large nationwide institutions except the state -- its communications technology lagged Europe's, and it also had a huge population.
Just over a hundred years ago, the de facto ruler of China, the Empress Dowager Cixi took all the funds earmarked for naval fleets and dumped into building a palace instead.
The Chinese Nationalists who eventually overthrew her in 1911 spent the next few decades failing to control endemic corruption at all levels of government. One of the reasons that the Nationalists lost the Chinese civil war was due to the deep dissatisfaction everyone had at their pervasive corruption.
In fact, corruption at the bottom rungs of the bureaucracy basically didn't exist under Mao and was aggressively weeded out--corrupt officials were regularly imprisoned and shot. For the average Chinese person, Communist rule, despite its own problems, was a large step forward in terms of quality of life and quality of governance.
TL;DR - Communism in Eastern Europe was probably a step back, but in China it was an improvement on what existed before. Guanxi is how things get done when you don't have strong institutions.