I don't think that line of reasoning is completely wrong but I think it's often over-emphasized as some sort of durable higher truth rather than a simplification of very complicated social factors, and usually this tends to significantly under-weight the ability to change things — e.g. many Americans are used to thinking that we have a huge cultural lead for entrepreneurship but the popular opinion there hasn't adjusted for the degree to which Europe, Canada, Israel, etc. have closed that gap over the last couple decades.
In the case of China, I don't think there's any question that it used to have higher barriers to innovation but I'm not comfortable concluding that this will be true for that much longer given how many people are trying to change it. Every time I read one of Bunnie Huang's gongkai posts[1] it really seems like the view in 20 years will be radically different.