No, the reason you don't see many open source models coming from the rest-of-world (other than Mistral in France) is that you still need a ton of capital to do it. China can compete because the CCP used a combination of the Great Firewall and lax copyright/patent enforcement to implement protectionism for internet services, which is a unique policy (one that obviously came with massive costs too). This allowed China to develop home grown tech companies which then have the datacenters, capital and talent density to train models. Rest of world didn't do this and wasn't able to build up domestic tech industries competitive with the USA.
On matters protectionism,the Great Firewall was the best thing that China did.It prevented them from digital colonization like the rest of the world.
Chinese labs are mostly (all?) privately funded, as far as I know. Alibaba isn't a SOE. That's why I didn't mention state subsidies, although that might be happening (and certainly is happening w.r.t. access to electricity).
I didn't mention lax copyright/patent enforcement in the context of AI, but rather, the prior years in which China was able to build up local tech firms capable of taking on the US tech firms. It's mostly in the past now, they don't need to do that stuff anymore.