I was just in China on vacation last November, and in terms of the atmosphere in public places, the U.S. almost seems like more of a police state than China is. Some examples:
I had mistakenly packed scissors (y'know, sharp pointy things?) in my carry-on when passing through the Beijing airport. The security guard said, politely and apologetically, "I'm sorry, I can't let you take these on the plain." On the trip back through Chicago/O'hare, a woman was yelled at and pulled out of line for having hand lotion.
There are no announcements in Chinese airports saying "By order of the TSA, no liquids may be carried on board flights, and all persons are subject to search by uniformed TSA officers."
There are no announcements in Chinese subways saying "Safety is our number one concern here on the MBTA, and so we ask you to report any suspicious persons or packages to the nearest MBTA employee." People are not manhandled and pulled off trains for talking about explosions, as happened to the person sitting next to me yesterday.
Chinese people can and do criticize their government all they want - verbally. Several people we met told us "Yeah, the government censorship is disgraceful, but it takes time to change things like that." When we visited a Taoist temple in Hong Kong, there were Falun Gong posters all over the place.
China's certainly not perfect, and overall I think its political freedom is somewhat less than the U.S. The Chinese media is still very much controlled by the state, and people can have reprisals made against them for things they say in print. The Internet is censored, as everyone knows by now. China lacks the culture of dissent that the U.S. has, so many people seem accultured to political passivity. China leads the world in executions, though it's worth noting that only it, Iran, and Saudi Arabia have more executions than the U.S.
But it absolutely is a matter of degrees. China is not that much worse than the U.S. is. And China's velocity is at least in the right direction: if the U.S. continues the course it's been on since 2001, within 5 years it will be a far more repressive regime than China.