China is pointedly not spending a third of their manufacturing on AI. They're also not spending a third of 1940s America's manufacturing output on it. They're not spending even an inflation-adjusted amount of money on AI as was spent on the Manhattan Project. China is not pursuing hyper-scaling as a technique to improve their generators, unlike the US. They've already shown much more progress with a much faster and cheaper process. These new chips, if they ever develop them, will improve those models, but they won't be hyper-scaling them like US companies are.
Hilariously, what will probably happen is they'll start selling chips to compete with Nvidia. There's lots of demand for these chips and not nearly enough supply. There's already a five year backlog of orders for already outlayed data centers. Which is doubly hilarious because these chips run super hot and only have a lifespan of around three years.
It's even more funny once you take the circular financing of "AI" companies into account. Nvidia invests in companies like OpenAI that then spend that money paying data center companies to build more data centers. Those data center companies then buy chips from Nvidia. Nvidia then uses that income to make more loans to AI companies, etc. This is obviously a Ponzi scheme-style financing structure. An introduction of Chinese chips would actually disrupt this scheme just enough to pop the bubble as it's not actually generating wealth; it's just passing the same $10 around between each other and calling it economic activity. If the Chinese firms can pull even a small amount of market share, they'll rapidly deplete the alpha from the industry.