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Firstly, it's not easy to build a super computer, even if you have all the chips. I mean, you can also argue that western super computer are built using cases and cables made in China -.-|
Secondly, China used a lot of Nvidia chips for energy efficient vector calculations - it of course could replace them with some domestic chips, but the computer would use much more energy and in the end, we've only got one global environment which we all have to protect jointly.
Thirdly, I don't think it's such a good idea to build one super powerful computer in China. As such a huge country, it'd be better for China if every key university had it's own computing center and bigger jobs are distributed among them. Of course, this would be a little more expensive - but it would forster innovativity and development of every region. (It's a general problem in China - Chinese government often builds one huge project which is then the biggest in the world, although several smaller projects would be better).
However, it's a great achievment for Chinese engineers and it will help fighting the country's shortage in computing, so that's a great thing.
I've heard that China is developing it's own chips too, but personally, I doubt that they can really compete with intel and Nvidia. I believe that China's perfectly cappable of making chips that are just as fast or even faster as intel chips (like for instance NEC did), but the problem isn't the speed - the problem is the detail architecture and the stability. It's the same with AMD: the company makes very powerful chips, but they're just not as stable as intel and Nvidia, which is why I also had to stop buying AMD chips.
However, I'm ready to be positively surprised and I hope I will be, as I don't like paying Intel's monopoly prices for my computer chips...so jia you :)