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In spite of their best efforts, they still have no domestic EUV industry to speak of. Contrast with the domestic advanced semiconductor industry they do have. Clearly one of these is harder to replicate than the other.
They do pay well, provided you don't mind living in a country where the government can and will disappear or execute you for wrongthink, regardless of your station or importance to the technology roadmap. Many such cases!
Again, no one can stop them with sufficient motivation and willpower. But it can certainly be made to take a while and cost a boatload. As HPC systems get bigger, there are topological and latency challenges that compound on each other. And they will have to keep getting bigger, slower, and less efficient to keep up with the pace of innovation in equivalent western systems. It's not an insurmountable obstacle, but it costs resources and time. ETA: More power also means more cooling required. More power density in less efficient devices places huge demands on cooling, or forces more lateral scaling, which also compounds the problems above.
I'm assuming that the big concern with high-volume Chinese HPC is them achieving AI dominance and outpacing western innovation long-term - correct me if I'm wrong. I think, for very large AI, the software, and particularly the training techniques, have orders of magnitude of improvements awaiting discovery and implementation. This could go either way, western or Chinese advantage, with the understanding that Chinese industrial espionage is highly effective at extracting and implementing mathematical innovations in software, substantially moreso than hardware. I think it's more likely that the high costs of hardware force China to be parsimonious with their compute resources and ultra-efficient with their software craftsmanship, than that they just steamroll through the obstacles and disregard the expense.
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