No. The problem isn't that China is now starting to show quality, the problem is that Anime in and of itself is becoming more repetitive. I love anime, I love Japan I've been there twice, and I look at each season as to what it has to offer. The issue is part of the fanbase growing older, and yet not many seinen/adult targeted stories come out. Too many Isekai come out imo, I think it has to do with the mental state of a lot of anime watchers, especially in Japan itself. Like distopian stories being more popular when society is in a depression. I like some Isekai, don't get me wrong, but it seems there are just too many of them these days. It sells well so its just a safe thing to create, but re-using a popular concept over and over and over leaves diminishing returns.

Thing is tho, Japan has Isekai.

Korea has Dungeon fantasy (Solo Leveling)

China has Cultivation fantasy.

All safe choices, going for what you know will sell, this is because those originate in Novels/Manga, and following those you can kinda see some of the future of Anime

Saw it with Isekai

Seeing it now with Cultivation fantasy, except the Chinese are choosing a different animation style most often, computer animation, which isn't for everyone.

And I predict we will see it start to ramp up from Korea now too, many 'versions' of Solo leveling will come out I think, as in with hunters going in portals to dungeons, but only time will tell.

Cultivation fantasy is in some ways even more repetitive than Isekai is though, I often find the novels I read lack true depth, its full of similar things happening over and over again, even within the same story.

But people gobble up slop like no tomorrow anyway, so it'll sell.