China has a pretty big literary tradition
And the only shit people(Chinese or westerner) care about is either 2000 years old, 200 years old, or a webnovel. Nobody normal is going to go and learn Mandarin so he can learn literary Chinese(200 years old) to read 1(1) book, and then go learn literary Chinese(2000 years old) so he can read another 3(3) more books. They could just read it translated to Mandarin but then what's the point? May as well read translated to English instead, that's what a normal person would do. The webnovels are nice but as with Japanese and Korean ones you have to dig through a billion garbage ones before you find something good.
is starting to make some good vidya games and cartoons that utilize aspects of their culture and history.
The anime are all eh. They're just Japanese anime but in Mandarin and with lower quality in all ways. Not untolerable but not good either, maybe they'll get better over time but who knows. I feel like you're trying to equate China to Japan just because they arr rook same or something. The situation of the two countries is very different, Japan started prospering in the 70's and 80's, China will (presumably, maybe) start prospering somewhere between the 20's and 40's, everything is different from technology all the way to how people interact and create. There's many differences in the government, local culture, amount of people and their average wealth(notice how Japanese anime and the like just so happened to blossom when the average Jap was swimming in money), censorship, understanding of the world and so on. Just because the Japs made good anime and games doesn't mean that Chinese will, and in the first place even if Chaina becomes Nambaa Wan as you think that doesn't necessarily mean that they'll make ANY good content. Look at American literature and cartoons for example, there's some decent, nice stuff but they're very few.