Tax breaks, operations of state owned industry, other incentives etc are guided by five year plans implemented by a party bureaucracy.

I can't believe we're talking about China in the context of a Cloud sovereignty issue and this is even a question.

Having worked for these Cloud providers China has consistently used bureaucracy to exfiltrate Cloud technologies and to tip the scales of effectiveness of offerings through levers with China Telecom/Unicom. Analyzing the backbone, you could see it in real time.

China basically offsets its bureaucracy by doing the one thing Europe has not done so far in this space: overtly hurt foreign competitors. It doesn't matter how superior your offerings are if the end customers end up throttled creating a less desirable experience than the less-featured, stable domestic competitor.

Unfortunately - the elephant in the room is China got to where it was by being overtly adversarial with the US from the jump after 2010 which translated to a number of anti-competitive measures. The EU's in a spot because it's mostly responding to Trump and a poorly written US law. The US and EU are weird friends in that we could both exfiltrate each other's tech, patents, and industrial assets and move on with business but that's not actually what either side actually wants.