My counter point to this is Hockey and the USSR. Hockey is also a free flowing game that relies on team discipline and individual creativity. The USSR was an amazing hockey machine.
It comes down to cultural reasons. USSR's people liked hockey and the USSR supported hockey monetarily. The USSR finds success in hockey. Brazil's people like soccer and Brazil+Brazil's private teams supported soccer monetarily. Brazil finds success in soccer. China's people don't know what they like yet. The people have just started to have have free time because of the recent economical liberalization. China has only started to support soccer monetarily. So it's reasonable to expect that China doesn't play soccer well. They could be better in the future as long as they have the time and culture change it needs.
Side note: I don't know why England sucks. The people love it, god awful amounts of money are spent on soccer/football. But thank god they haven't figured it because the world would not hear the end of it...