Everyone wants widespread adoption, of course. I'm sure that China is also working on more expensive frontier intelligence models behind doors, but they're lagging behind America on that front. Going for cost-optimized open weight models is their bet to stay relevant in a market where they can't compete for the "luxury" segment. It is important for them to get a foot in the door and maintain a presence in the press to attract future customers, given the general animosity towards China in the west that they need to overcome. Similarly, European providers like Mistral are hopelessly outclassed in every respect and thus try to carve out a niche in the market with regulation and anti-American fearmongering. They position themselves as "privacy-conscious" not out of goodwill but because it is their only chance to survive as a company with an utterly inferior product.
I didn't think of the European angle, that's something I can update in my synthesis.