It’s not like this is a new tactic, china has been very successful at wiping out competition by undercutting them using state subsidies in many sectors of the economy.
The same tactic is in the USA. Like every new AI datacenter has ~10 tax waiver + explicit subsidies + favorable loans, etc, etc.
If china anointed one company per sector, they would have no reason to be so cost competitive globally. There would be no structural cause for Chinese products to outcompete the rest of the world. You can see some of this in the US, where these kinds of anointed companies exist (say e.g. Boeing/other defense contractors, at least post the 90's). They are (famously) not particularly cost competitive. This is also exactly what you'd expect economically.
Their Barbarous Wastes