Thank u for your economics and thank free market, and Friedman. So why not go to the question: why more the US capital flowed to China than India which's a 'democracy' and friendly to the US despite lots of similarities with China (population alike)?
Apart from the other responses which are debatable and bordering on conspiracy theories, I'll address what you've said here more broadly, but before I do I want you (if you are Chinese) to note something; Friedman believed that Capitalism is a
necessary condition for freedom, but not a sufficient one. When the Chinese realize this, they will know that China will stop being seen as a tyrannical regime when it ditches communism in favor of democracy.
Having said that; the reason China has enjoyed a more substantial amount of FDI partially has to do with the Sino-Soviet split (which depends on your perspective), and also the fact that Jawaharlal Nehru, who was a Socialist and politician who supported oversized, corrupt, centralized government for India, and who chose the Soviet Union over the US in the 1950s for dubious reasons has created a complex situation in which western aid and investment has been given to just about everyone in the region. The main reason for a lack of major support to India has to do with Nehrus NAM policies, and alignment with the USSR.
Indeed one could point out that had it not been for Nehru and his successors who have advocated some disastrous economic and foreign policy initiatives for India; then India and the US would have been long term allies, India would have benefitted far more from aid, FDI, technology; Pakistan would probably not exist (or at the least be put in its place), and China would have collapsed just like the Soviet Union.