How? China doesn't possess the capability to build their own competitive chips. The chips they do manufacture do not require high precision. Everything I've read about China over the last few years has indicated it is, generally, unsustainable. From their disastrous fiscal policies of internal hyper-finance [0], their weakening navy [1], their aging population that's well on its way through decline [2] and the [3] continued climate issues that loom over China - it doesn't look all that great once you peel back the facade. China is in a big mess that started back then and continues to get worse under current leadership.
[0]https://www.csis.org/analysis/chinas-slow-motion-financial-c... [1] https://news.usni.org/2021/01/22/chinese-navy-faces-overseas... [2] https://www.scmp.com/economy/china-economy/article/3157385/c... [3] https://www.world-energy.org/article/20509.html