3. China was not stupid enough to rely solely on the free market to develop strategic industries. A few deliberately old sources to show this is not a sudden new development:
Back in 2014, the central government set up the China National Integrated Circuit Industry Investment Fund. - https://www.scmp.com/tech/enterprises/article/2145422/how-ch...
Over the next decade, China plans to invest up to RMB 1 trillion (US$161 billion) into its domestic semiconductor industry as it seeks to become a global power in the sector. In recent years, Beijing has repeatedly stated that developing its own integrated circuit (IC) industry is of integral national strategic concern. - https://www.china-briefing.com/news/chips-all-in-investing-i...
https://en.wikipedia.org/wiki/China_Integrated_Circuit_Indus...