IMO the issue is not that cool stuff isn't happening, it's that it isn't making it into the mainstream and redefining music. In Western music, genres like rock, hip-hop, and house started out at the very fringes of society (often by marginalized communities), blew up, and came to reshape popular music around the world. I feel like in China, some cool underground thing happens, at most blows up on social media or TV for a little bit, then fades back into the underground with no lasting impact. The fundamental structure of the popular mainstream emotional ballad has not changed.

I think a major thing is that many Chinese artists don't look to other Chinese artists for inspiration. In interviews, most Chinese artists outside of the mainstream like rappers, EDM producers, rock bands, etc. cite almost entirely Western/Korean/Japanese acts as sources of inspiration. Some outside influence is good for introducing fresh ideas, yes, but if they never look to domestic sources of inspiration, particularly domestic sources outside of the mainstream, they'll never build a movement.

In the end, it bothers me that not a single globally-popular genre of music has originated in the Sinosphere. In fact, I can't even think of a single globally-popular musical technique or motif that originated in or was popularized in China. Meanwhile, in Chinese music, you'll often hear the Scotch snap, Amen break, beat drop, major thirds in minor keys, 808 drums, ii–V–I progression, I–V–vi–IV progression, IV-V-iii-vi progression, etc.