This paper should be viewed in retrospect with the present day knowledge that Deepseek exists - regulating compute in not as easy or effective as previously thought.
As for the Chinese chip industry, I don't claim to be an expert on it, but it seems the Chinese are quickly coming up with increasingly less inferior alternatives to Western tech.
The thing is, though, that Deepseek's training cluster is comprised of mostly pre-ban chips. That and the performance/intelligence of their flagship models achieved parity with western models between two and eight months old at the time of release. So in a way, they're still behind the Americans and the export controls hamper their ability to change that moving forward.
Perhaps it only takes China a few years to develop domestic hardware clusters rivalling western ones. Though those few years might prove critical in determining who crosses the takeoff threshold of this technology, first.
As for the Chinese chip industry, I don't claim to be an expert on it, but it seems the Chinese are quickly coming up with increasingly less inferior alternatives to Western tech.