China's "development" is still globalization driven. With almost 1.4B producing great numbers isn't exactly rocket science. So far China's tech sector is a bunch of copycats that only exist due to protectionism. I'm skeptical about China all of a sudden producing true innovation in AI.
I`ve been to China last year, the situation is quite different in China`s technology. The government actually supports research and development with money. This way smaller companies can afford developing new technology without affecting their main business.
For example, a company produces some general issue software that keeps it alive in the market and at the same time their special R&D dept works on AI development without hurting main production. I saw it myself, although in different application - it wasn`t related to software, but rather to machinery - but it`s easy to imagine the same situation in IT.