Because there are over 200 competing 3d printing companies in China.

Because the owners want to get rich, not live as pensioners.

Why does anyone innovate? When I sell something I don't care if the dollars come from the end user or the subsidy, I just want more of them.

Because China is actually a capitalist free market economy not a communist one.

Chinese companies compete with eachother ferociously. And Chinese society itself is dog eat dog. Everyone wants to make money.

Well, save for the part where the government directs the parts of the economy they care about.