China folks are more hungry than most in the west, with the exception of Silicon Valley and New York, and China isn't "burdened" by quality of life, and work life balance, which isn't healthy, but that's one of their edge.
Even for U.S. AI Startups, asian makes up a majority of the research + technical staff. I think the incentive to go into PhD in the west has been gradually declining for years, while PhD programmes have been flooded with Chinese Students. I think it's something that the U.S. government needs to address to try to remain competitive in the longer term.
Manufacturing is something that the west actively gave up and migrated the skillset to Asia, notably China and Taiwan.
In manufacturing they've been ahead for decades, and it's nowadays very common to find state-of-the-art software from China.
West, and neoliberalism, is totally screwed in a few decades.