Infrastructure is a catalyst, so probably we should look into the ingredients too but in a hindsight its obvious that China is not just office buildings and trains since they do have cutting edge tech in many areas.

In fact, a lot of western designed stuff made in China is only possible thanks to the Chinese innovation in production. If you start digging the OEMs of western brand products, you find that the manufacturers of the parts like cameras, sensors, motors, controllers, antennas, speakers etc. are all standalone Chinese companies with their own products that are not simply produced in sweatshop but supplied to the western brands as a original designs. Surely it goes beyond electronics, the same is valid for the more traditional stuff like textiles or plastics etc.

What China lacks on is culture. Surely they have very deep culture with traditions dating back thousands of years but on the global scale the Chinese culture is a curiosity at most. Arts and lifestyle is dominated by the west in a sense that everyone on the earth has some part of it in addition to their local culture and that culture dictates the mental models of all the people, including the Chinese people. When you have a hegemony over the culture, you say how to live, who to like, who to hate, how to use technology and what to consume.

When I moved to the UK from Turkey, I noticed that all the stuff regarding the functioning of the society that we blindly follow made sense in the UK and a lot of restrictions and rules that we had in Turkey were designed to force the Turkish society to function like a western one. That's why you can innovate in culture changing stuff in the UK but it's very hard in Turkey: because UK is on the cutting edge and Turkey merely follows some cargo-cult-like culture.

Let me give you an example. In Turkey banks are very good at tech and design, we used to do chip&pin forever, contactless payments and alternative channel payments existed since ever and our ATMs can do almost everything that a bank can do and their mobile apps were always very well made and powerful. Why wouldn't Turkish banks dominate fintech then? We hear all the time about some UK or US bank making something easy to use and getting huge rounds of funding, making them more valuable than the Turkish banks that did these things since years? It's definitely not the lack of talent or entrepreneurship as these are found im ample amount in Turkey.
Turks that travel to UK/USA/EU are shocked by the primitiveness of the everyday banking.

I think the reason is this: In the Turkish mental models we don't know why we do the thing we do it comes of utilising Western institutional models. We usually have rigid rules and structures that are designed to force behaviour which dictates a mental model about how something has to be and that cannot be questioned.

At first, the Turks find the Banking in western countries extremely primitive and they simply cannot think about institutions doing financial services without being a bank. In fact, fintech in the UK is fine but you need to look beyond HSBC or Lloyds, you can have Azimo for sending money abroad or Monzo for simple banking. Now Turkish banks and regulators are copying the west again and the mental model of fintech is being expanded to include non-bank payment processors etc. despite that they had the tech much earlier and these things were simply features of the existing banks.

When you are not at the cutting edge in a culture(financial culture, for example), you cannot innovate. Those who dare will be quickly put down for not following the rules or even making something hard to categorise according to the current rules. To question why and how you do something and innovate on the core platforms you need to have total understanding and you cannot have that with non-naturalized imported culture. It's like innovating on top of Apple/Facebook/Google platforms.

I think culture is the actual moat of the US and the west in general.