I think it does show, though, that the creation of models have already become a commodity. China has always struggled to compete with American creative products

I think it does show, though, that the creation of models have already become a commodity. China has always struggled to compete with American creative products (for a variety of intersecting cultural, educational, legal, and economic reasons). However they have always excelled at reverse-engineering / duplicating existing technologies, which falls more into their manufacturing-based educational-technological paradigm. AI is a target industry well-tailored to their industrial pipeline, and the state has a vested interest in dethroning western tech companies. So while they may not lead innovation (or when they do, it is only momentary), they will most likely follow this trajectory for the foreseeable future. They particularly have an advantage with regard to copyright law. OpenAI, Stability, etc are under fire for the use of copyrighted materials in their training. No such issue there.