This sounds whole lot like potatoh potahto. I think the former argument is very much the correct one: China can undercut everyone and win, even at a loss. Happened with solar panels, steel, evs, sea food - it's a well tested strategy and it works really well despite the many flavors it comes in.
That being said a job well done for the wrong reasons is still a job well done so we should very much welcome these contributions, and maybe it's good to upset western big tech a bit so it's remains competitive.
The decisions to mobilize a large rural base toward manufacturing and the central bank goals to keep the yuan cheap as a critical support of this project were absolutely national.
They were ultimately about bringing (or trying to bring) one of the most populous nations in the world out of extreme poverty; in particular the people of the country out of extreme poverty.
There are different policies in place today, and, crucially, bleeding edge tech is not gainful labor employment —- BYD has some factories with roughly 2 employees per acre of robotic production, for instance. Or datacenters where the revenue could scale but the labor will not.
So, these are different times, different goals, different political and labor outcomes. Reasoning about what China “must do”, or has as a matter of “national policy” should start with a clear look at history and circumstance, or you’re likely to read things incorrectly.