Japan is certainly going through a a creative crisis of sorts nowadays, but there are still some exceptions and plenty of Japanese games are still very creative and highly polished, even if the entire domestic industry is being undermined by slow corporate structures and silly trends. Having said that, we're long past the glory days of Japan when everything was new, exciting, extremely polished and the industry was pumping out cult hit after cult hit after cult it. There is much to be said on this but I will refrain.
China on the other hand simply fails for a huge variety of reasons. Firstly because they embraced gacha slop very earnestly because the CCP really wants that gacha tax. Secondly, China lacks an identity of its own, especially one that is marketable and pleasing to international audiences, so there is this very, very pathetic trend of them pretending to be Japanese, which is extremely off-putting. Finally, there is simply nothing valuable in the wider media space in China, there is no incredible cinema, there is no incredible literature, incredible graphic novels, etc. and certainly no incredible Chinese games. Why is China incapable of landing cultural victories? Everything either lacks bite and authenticity or there is this underlining mean-spiritedness that comes off as an inferiority complex.
I genuinely want to see great games and media in general from China. But they aren't doing anything at all. There is no Metal Gear Solid moment, no great RPG, not one single great platformer, nothing at all. It's all just so derivative and frankly inferior. And it feels like many of the Chinese industry's creative drive is being syphoned by gacha, which is so very tragic. It's very pitiable.