Why do all that when you can skip to printing money by knocking off something that already sells?
They can, but why should they when the world will innovate for them? They have nuclear weapons and most of the world's manufacturing base already, they do it because can get away with it.
1.The government do promote innovation in a violent way and lays-down a lot of infrastructure. Start-up has hence became fashionable to do and they did produce a lot of useful product for domestic consumption which is a different playing field. A lot of time they don't need to go global (china have a bigger mobile game market than the US for instance) and that is part of the reason a lot of the products are not visible to the world.
2. Form my experience with Chinese start-ups they haven't accumulated the design thinking and attention to detail as SV does. They also lack the history of CS as the INTERNET got popular in china in the late 1990s. One exception of such lack of richness is DJI as the founder is dedicated and brought good culture.
So in short the Chinese are trying very hard, government are helping. They have the brain power but lacks richness and system to make real innovation, also sometimes they have no need to go global.
It's dramatically faster and cheaper to steal than to invest decades and countless billions of dollars doing it the hard way.
The only way China can fully stand toe to toe with the US in the next two decades or so, is to aggressively plunder beneficial IP wherever they can. There has been no serious consequence for them doing so the past 30 years of their rise. It's not below their dignity, because the mission overrules all. They'll continue doing it until the cost is too high; their calculation is probably that by that point they will already be fully self-sustaining as a superpower. At that point they'll show you the door if you have a problem with it (or worse).
China very carefully plays by the hide your power and bide your time strategy. Xi recently admonished state media about bragging too heavily; that's all about playing down their strength. China's ideal is to play it down until they're strong enough so as to be beyond a reasonable challenge by other powers (at least in their sphere of influence, Asia broadly).
I'd argue they're probably right, barring some massive financial crisis.
There are more middle class people in china than there are in total in the US - they're buying cars, taking vacations, and generally being a huge driver of consumer goods throughout the world. I don't see the US keeping up except at being 1. already rich, and 2. generally home to new innovations. We'll be the R&D lab of the world, but we won't be the primary economic driver.
Engineers and innovators growing up in such environment are naturally not adverse to cutting corners to reach their goals quickly.
However I have to add that, given the huge population of China, the top 0.1% can still be enormous, and once China learn to discard its shardy attitudes, they can race ahead rapidly.
China should on average has 4x more people stealing tech than US, based on pure population numbers.
Even Chinese are 75% less likely to innovate, that's as many innovators as the US.
> Their other homegrown products such as WeChat and Xiaomi seem pretty competitive and very catered to the local market.
Well obviously they can based on the second sentence you wrote.