The excellent Chinese DAC implementation didn't trickle down from luxury brands. Topping and others have been the center of healthy competitive innovation.
My POV is you open up a major can of worms if you wish to exclaim Chinese DAC brands as the "center of healthy competitive innovation."
At this point in digital audio the design of a quality audio DAC is neither a feat of great engineering or innovation. The burgeoning success of the Chinese DAC industry is mainly the result of utilizing chips and engineering that were pioneered or developed by other companies. Their advantage is they can produce in mass, and with quality, at price points that can virtually undercut any free-world produced (or based) product, and receive state sponsored benefits in doing so.
I would not associate the word "healthy" with that. Yes, most certainly, it is a direct, immediate and major boon to the free world consumer, as I indicated in my initial comments. But the indirect consequences can certainly be debated, which I will briefly undertake.
Now that these Chinese DAC companies have secured a major share of the low cost free-world marketplace, and eliminated or avoided the middle man in doing so, their next strategy is to focus on producing higher cost DACs in order to fully capitalize on the $500 to $1,200 market segment. One also cannot neglect the fact the Chinese DAC/Hi-Fi companies also enjoy an ever-expanding consumer class and base within in their nation of 1.3 billion people, all hungry for such consumer goods. Thus their capabilities of scale are unequaled in manufacturing history.
If you are a free-world independent company how do you survive against that? Mainly in three ways: 1) you move your manufacturing to China or another cheap labor market to contain costs; 2) you focus more, if not exclusively, on high-end, expensive products aimed at a smaller but affluent target audience; 3) through M&A you aggregate with one-time rivals as a way to achieve more scale; or 4) you work a combination of 1-4. In the long run you still stand a good chance of loosing.
I happen to see that as the antithesis of healthy competitive innovation.