For highly complex technologies that require tons of capex to get anywhere, Chinese firms are perfectly happy to depend on foreign companies if they are allowed to.

Chinese chipmakers weren't willing to use the first batch of domestic DUV machines because they simply weren't as good as foreign alternatives, and this made it doubly difficult for domestic machine manufacturers: they couldn't get revenue for selling machines, and they couldn't learn from their customers' experiences. The Chinese government, for example, is now apparently withholding Nvidia chips from being imported - despite the export ban being partially lifted from the US side - in order to incentivize local companies to use domestic NPUs instead.

Similarly, on a personal level, most of the (technical) folks I know here in China are using Claude/GPT models because they want to use the best models available. But, companies like Bytedance (Doubao) cannot use such models to serve their customers, and ordinary folks also cannot access these models without workarounds. As such, the market for domestic AI models is huge, which has uplifted a lot of the current AI model providers.

Ultimately, this creates a funny conundrum: sanctions mean that certain parts of the Chinese population can still access the "banned" tech - able to experiment with it and learn from it - while spurring domestic companies to seek domestic alternatives.