This is my normal point of view, but after thinking more about the industrial revolution in England vs the US, where the US started way behind, stole rapidly, then moved into "improve" quickly too, I wonder if it won't work out for Western companies.

The knowledge won't stay in a bottle. I doubt any treaty in the world could keep an automotive industry from developing in China. Maybe the only potential progressions are (a) let local clones develop while ignoring the market, watch hopelessly if those local clones then go on to innovate further than you or (b) do ventures like this to at least be directly exposed to any potential upside if the local folks surpass you?

There's also a side question here about the difference between physical goods and software. Something like WeChat faces a really steep uphill climb to conquer the west because the starting conditions are so different - I'd have to be convinced to change from our existing ways of doing the same thing, vs being one of the first to enable things in a new market. On the other hand, smartphone clones can sell everywhere with the same hardware (especially once Google gave Android away freely). Japanese/Korean auto manufacturing is more the example for that (and obviously for Tesla), and that happened on its own.