The truth is Chinese system is also quite flexible at all levels and people commonly do not follow the rules or use different interpretations and implementations (at very least they workaround a lot). The audit system for many industries are not mature as well.

So yea ironically if you are a Chinese innovator at early stage you might find there’s much less restrictions in China to innovate (not necessarily from moral high ground as long as it’s lucrative ) than the US. Later you become big and draw more attentions but hopefully you know how to play by the rules. I personally don’t think it will make early stage innovation harder