Related is that china's manufacturing is more focused on low cost labour, rather than high skill, intricate (and thus higher cost) work.
Surprisingly, an ICE car is more intricate, and has more labour intensive parts that require a high skill labour force. Things like engine block manufacturing (and design), spark plugs, etc.
Battery EV are actually low labour - after all, motors are not "intricate", as they don't need to contain explosions!
I think that china has, prior to BEV, tried to reach the same level of car manufacturing as europe (ala germany), but has found that no matter what economic policies they put in place, the labour and value chain in china just cannot catch up to the well established ones in europe.
It actually makes sense that china abandon the ICE manufacturing sector, because the BEV sector at the time had no competition, and capitalism (and the innovator's dilemma) has prevented ICE car manufacturers from entering until they see the real demand - but by then, china has fully controlled the supply chain of critical components such as the batteries, minerals and capacity.
I do not believe that europe (or the US) can really catchup without a major shift in technology of the battery.