Starting with "China..." gives IMO an unnecessary political framing to this story. These were researchers at Chinese universities (almost all the same, Tsinghua), so it should say so. There are some cases where we say "America .." or "Russia.." but usually in the context of a body directly under gov't control such as military or federal policy. We never say "Europe develops a sailboat" or "India develops new diabetes medication", it would be "French startup develops" or "India's Biocon develops". Sure the government may have stronger hand in affairs than in other countries, but there's no reason to invoke a different framing because of a political difference.
"Tsinghua University Researchers Develop Photonic AI Chip" feels more appropriate.