Considering their massive distillation, if US companies stop publishing new models to the public, would China still be able to develop new open weight models?
I don't think China would strugle to scrape the internet for fresh data.
And they constantly publish state of the art LLM research (see DS4 context compaction and cache tech).
They have very capable tech giants. So while not being able to distill western models would probably have some impact, it's probably becoming lesser as time passes.
We might even see Western LLMs distilling Chinese models soon. If they aren't already to some extent.