I’ve heard several people comment that China is equally bad as Iraq (which is somewhat true). VodkaPundit has a good response to that criticism.
Just to add to it, since China has possessed nuclear weapons for decades now, the regional balance of power has already acclimated. Nor is China currently ruled by a raving madman. However, a nuke in Iraqi hands would be far more destabilizing to the region, and I doubt that Saddam is rational enough not to give nuclear weapons technology to someone like al-Qaeda.