America is being arbitrary, capricious, and unfair, in contradiction to the neutral and generally applicable law in America. But China's legal system has been arbitrary and capricious for decades, and is rotten to the core, consistently elevating the whims of the ruling party over rights and due process.
To use nonsense numbers: the US is designed to be 0% arbitrary but is being 20% arbitrary here. China is designed to be 90% arbitrary all the time. Clearly means China can keep out all the firms and be virtuous, but when the US keeps out any firms for any reason they're unfair and wicked!
You have two systems, and one of them is having doubts about the efficacy of its own system.
In theory at least, China’s planning either results in less competitive alternatives, or eventually it would have to open up its economy (when the playground is more fair) to foster its own innovation. If it never allows competition then innovation would languish.
If we take action in contradiction to this natural series of economic events, we would be hypocrites as we’d be losing faith in our core economic beliefs.