China doesn't need to steal tech much any more. The big US tech companies were more than willing to sell it to them for the last couple of decades - sales are good for business, don't you know!
And now China is starting to take the initiative in some tech areas. The USA is being deprived of tech wizards from within due to ongoing reductions in investment in education courtesy of De Vos. The scientific community is getting older and thinning out. The brain is not just draining overseas, what remains is getting decrepit and shrinking. And Trump could not care less about that because it doesn't affect him personally.
Not that I disagree with the suicidal short sighted stupidity of many US firms, China still very, very much steals tech. They don't
only steal tech, but it isn't at the level of other countries there either.
China has become a leader in some fields, but has failed to do so in others despite massive investment (semiconductors for example). But because of a lack of competition for several reasons, it hasn't happened (unlike shipbuilding which, wow did illegal subsidization help that!). China's one party rule (on top of being, you know, actual communists) means that there isn't even much competition for their pork, let alone traditional market incentives to reward performance. This is a huge drag on their investments, and smaller promising companies struggle to get funding while the larger favorites of corrupt politicians are awash in government provided capital. If there was a viable political cost in the from of a challenge from another party, then maybe, but they don't even have a free enough press to get upset at this inefficient use of funds. Many of these mechanisms mirror the waste in US defense spending. Much of it is hidden, favorite companies get money despite failures, etc. This is appropriate as China is spending roughly the same percent of its GDP on these tactics as the US spends on defense. China not only subsidizes capital, but also land and utility costs for these companies.
Many of these industries have actually grown
less profitable as they have gotten larger in China. Most return far below market rates. It should be a situation that mirrored the Soviet corrupt overspending that collapsed them. There are several factors that make that not the case, not the least of which is Trump seemingly playing right into their hands. Their markets actually recovered
before the announced phase one deal (which frankly sucks). China needed taking on and the Trump GOP did it the dumbest way. Targeting steel and aluminum? It's not even an amateur move.
Beyond that, they have NO affirmative argument, no positive strategy, to actually help things here. As you say, they're actively making innovation incentive and factors worse. The anti-science GOP is immeasurably hurting the US and US business. They are negating the systematic advantages we used to have, and amplifying our weaknesses. It's madness.