Chinese companies have at least three major advantages:

1. Price of electricity is low because of China's excellent energy policy. Admittedly this should absolutely be a priority of Japan/EU, but it isn't, so first you'd have to start there...

2. Because of #1, China already had massive infrastructure in place for eg. crypto mining that was readily repurposed. Japan/EU never engaged in this fad, so they have to start effectively from scratch in building out the GPU infrastructure.

3. Chinese talent is relatively isolated from the US economy. US-aligned economies must compete with the US for talent. It's hard to develop technology at a reasonable cost when all of your top talent is leaving to get paid 10x as much by speculative gamblers. If you don't have a very good reason to believe the gamblers are making a good bet, it's better to wait for them to go bust.

Added on to all of that... where is the upside? Chinese models are open anyways. There is nothing that merits this being a matter of urgent government intervention at all, it's basically pure downside.

Not really a price thing nor an infra thing.

US has really cheap energy and far more compute by a very large margin.

The real reason is chinese gov wants to crush US ai industries and own the market. Same thing they have successfully done multiple times in other industries now the difference is this time the US isn't seeming to back down.