They are not catching up to US models. The only Chinese models that attain a modicum of competence are all, sooner or later, are discovered to be trained by exploiting US models (in fact Deepseek itself admitted so about 1 year back).
Chinese models are not innovating anything, they are just doing what China does everywhere else: copying the West… poorly but cheaper.
For all practical uses of the word, that's exactly what we mean by "catch up".
Whether they get there by distillation, or by pirating all content themselves just like the US labs, doesn't matter for the topic at hand.