How is that different from what the US and (to a lesser degree) the EU tried to do? Both are examples of capitalism.

Actually I know why it's different, I was just doing an online knee jerk response the difference is that western capitalism has a hands-off (but regulated) approach, letting the companies do their own thing. China and their companies are much more involved. I'm sure the US was a lot more directly involved in setting the directions of its industry in decades past, but since then the industry and stock market took over the reins.

Another factor may be that in the west, workers have more rights, unionized, and set their own boundaries. But they were also constrained - what would've happened if someone at Ford 10, 15 years ago said "I want to develop an EV?". In the US, it took a new company (Tesla with a heap of investor money) to make strides in that area. But because Tesla didn't have any actual experience in making cars, they reinvented the wheel and are (from what I gathered) still building sub-standard cars.

If an experienced company like Ford or VAG set aside money and resources to reinvent the car every once in a while they would've been able to keep up. As it stands, all the existing car companies bolted a battery and engine to their existing models, turning their cars into some weird frankenstein of 20+ year old car electronics, electric drives, and entertainment systems because they didn't have what it takes to design a car from scratch.

They also tried to min/max and moved a lot of production to China; short-term that was a benefit, especially VAG was the biggest car manufacturer / seller over there, until they caught up and overtook them in very short order.