Because my wife is from China, I have traveled to China many times and have played and been coached there, and I have seen how kids are taught.
One thing to keep in mind is that the price of Japanese and European equipment in China is about the same as what we pay in the US in absolute terms. Given mean monthly incomes in China (much lower than in the US or Europe), this is very very expensive. So kids starting out will always use Chinese equipment, which is very much cheaper (because parents certainly don't know for quite awhile how good their kids will be, if they will remain interested, etc. etc., just like here). It is true that economic standards and lifestyles in China have increased a lot in recent years (and some people are super rich), but still, a middle class income in China is very low compared to the US or Germany or Japan.
Now Chinese rubbers have always been very hard and tacky by European/Japanese standards, and also quite heavy. This trend dates back to the 1960s at least. Kids learn on that stuff and their technique adapts to it naturally. Playing with anything like that is really different from the vast majority of stuff made by Butterfly or ESN. Now, once some of these kids get to be really good, enough to make it onto a city or provincial team then they are in most cases going to have some rubbers and blades supplied to them. Still, based on how they learned initially, there is a big preference for hard tacky DHS rubbers on the forehand side.
I noticed there that city level coaches who used Butterfly stuff (this is a medium sized Chinese city) had only one blade, often very ancient, and the rubber looked to be very much more worn than I would tolerate -- but again to get an idea of the relative cost for someone in China to purchase, say, Tenergy, multiply the costs in the west by about six. Not many people are going to change their rubber too often if a sheet costs nearly 500 USD! I'm well paid in my job and there is no way I would do that. Now, Chinese manufacturers have cloned all sorts of nice composite blades, and they play quite well, and they are cheap to buy there. Clones of rubbers not so much.
So people really need to keep this in mind. Part of the reason that Chinese players prefer they rubber they use is because they learn that way as a kid; now taking that basic formula and adding a really effective boosting to it, along with the pretty much perfect technique Chinese kids get hammered into them, and you see the amazing forehands that Chinese players have.
If course, even more important is that TT is one of China's national sports, talented kids are identified very early, introduced to the sport, and given great coaching, also 1.5 billion people, a lot of whom think TT is interesting.