Besides, it is not only cheap electricity alone, they are also the producers of the mining equipment as such. That basically means that they have another overwhelming edge apart from just electricity, i.e. they get access to the top-notch and cutting-edge hardware and technology before anyone else in the world. Obviously, they exploit this advantage in full
And that cannot be written off either
Hardware is being manufactured in China due to the lower costs, but that doesn't mean every manufacturer of mining gear is in Chinese hands. Does it give them some sort of an advantage? Perhaps, but Chinese influence in Bitcoin is diminishing to eventually such a level, that other than their cost-friendly-climate, there is not much that gives them any sort of significance.
It all eventually comes down to details
And so far the Chinese are controlling the mining process and the reasons for that is cheap electricity and first-hand access to most efficient miners. Is it going to change any time soon? That's unlikely. Moreover, if the electricity costs are the primary factor in the overall cost of Bitcoin mining, developing (and producing) mining equipment doesn't make much sense outside China unless you are going to export this equipment to China again (but in that case it would be cheaper to produce the miners there directly). To successfully compete against low electricity costs you would have to make miners with hashing power times greater than state of the art Chinese miners. I don't think this is possible because that would require really dramatic breakthroughs in the semiconductor technology. But Bitcoin is certainly not a field where such breakthroughs happen