Let alone the silly idea of challenging multiple countries simultaneously as was proposed at the thread root. China tried that with rare earths and failed about as quickly as could be expected; as I recall they lost a quarter of the market in short order and backed off.
The West is made up of countries that often have 40%+ of their economy made up by government spending, ie, spending that wouldn't happen under a free market. That is far more a problem as far as raw economic outcomes than long- or short- term cultures. China will collapse if someone high up in the government attempts a 2nd Leap Forward, culture matters a lot in whether they tolerate a bureaucracy with that sort of power (history hint - don't tolerate that sort of power in the bureaucracy).
But real question is, when has PRC government industrial policy failed? Essentially never. Especially under pressure. They're inefficient sure, miss deadlines, but overall they have either delivered and caught up on almost every strategic sector of interest, except leading edge semiconductors. They even caught up on turbo jet engines within last few years, it's within single generation of performance, behind on reliability (hence operating costs). Which makes commercialization an issue, but that's hardly factor when alternative is nothing.
EUV being "hard" is to be quanitified. Despite narratives to liken EUV to black magic, it wasn't an Manhattan project effort. Before first commercial EUV system was released ASML had ~10k employees, Zeiss SMT had ~3k, Cymer had ~1k. EUV developed without any pressing strategic urgency for 20 years. It wasn't a massive commercial/strategic undertaking. For reference, Boeing/Lockheed/Airbus had like 100-150k in 2010s.
Also PRC growing at modest 5% vs previous 8-10% with RE speculation. 5% because without excess RE, PRC still has many easy growth drivers for recession. and RE is hardly an exitential crisis that affects development in other sectors. Only idiots thinks PRC economy is just a giant RE ponzi scheme and nothing else. US S&T growing throughout GFC too. There's plenty of money and more importantly, finally talent, to go around. And economically it's dumb to not dumb stupid money in semi, when it's PRC's largest import by value. Indigenous semi will save trillions from going to western pockets/western strategic industries. Simply not paying western IP fees / rent pushes inefficient PRC semi processes to be into commercial viablity. It pays for itself.
The Mainland Chinese economy grew more than 5% last year. It is no where near a recession.
