Sure, and there’s nothing wrong with any of that. The system allows for flexibility that’s necessary for innovation. Companies trying speculative things is how technology progresses. Some ideas will be good, others will not. Meanwhile, the government nudges overall development towards particular goals that are seen as socially useful.

If this particular company is making a product that’s not viable then they will die, and that’s perfectly fine. If their idea works then it will produce something useful that will advance the state of aeronautics in China. Either way something useful will be learned in the process.