The difference between the two cases you outlined is that if a US business has its IP copied by a Chinese business and that IP is recognized in China then the US company can sue the Chinese company in China for damages resulting from infringement.

If there is no mutual recognition then the US business must sue in the US, and the judgement may not be recognized in China, making it difficult for the US business to collect.

The other difference is that if IP is recognized in both the US and China as a matter of treaty (like the WTO or Berne Convention) and a Chinese company copies the IP of a US company then the US can sue China in the WTO to enforce compliance.