The CCP knows that while they have a lot of economic and geopolitical power, their military and cultural power is severely lacking. Japan and S. Korea have lots of soft power in the form of entertainment, pop-culture and consumer products, whereas China is still regarded as the place that makes all the cheap crap at Walmart.

So when a Chinese company makes a cultural product that shows promise for becoming a pop-culture phenomenon, going out of your way to undermine that is legitimately subversive to China's soft power. This is the country that promotes faggotry on TikTok while prohibiting that same faggotry on Douyin, the fact that our own government promotes the same subverse brain rot as our most powerful adversary is its own can of worms but regardless, the CCP knows how this game is played.

I'll note that yes, China has had an influence on pop-culture with kung fu films and the like, but that stuff mostly came out of Triad-sponsored Hong Kong studios from back when HK still had freedom. The Cultural Revolution and China's subsequent totalitarian system gutted their ability to produce anything remotely creative, interesting, or even entertaining for generations, but it looks like they're finally starting to heal on that front.