I essentially fully agree with you, here. To be honest I'll forgive China for AI same way I'll overlook some real concerns about their censorship - I understand they have a need to be on top of it to avoid being totally screwed over by other countries. It's a bit of a necessary evil.
I still hate AI in its entirety, I've been to China since the proliferation of AI, and I don't think AI is doing them any favours either. At least from my limited experience using native services, I found slop and AI chatbots inserted into every last app and website as much as in the west.