> I still have no idea why westerners assumed "Chinese can't innovate, they can only replicate".

Did they? For how often online comment sections about China need to point this out, I can't remember seeing this claim being made in reality ever. China has been the next big thing for the past 25 years. And if people pointed out that Chinese products were of low quality, well, that was certainly true. Japan and Germany were also at one point known for low quality products.