Doesn't this have a very simple explanation? It's not that Chinese style animation is fading away, Japanese influenced style simply came because a lot of post-production of Japanese anime got off shored to China in the early 2000s when interest in domestic animation was low. Once domestic capital/market is big enough, those workers brought the influence into their domestic works. Recent animation work/films have a markedly higher quality and stylistic choices than those of the early 2010s, once directors and animators have the time, capital and experience to strike out away from what's comfortable. Even indie studios can make exceptional content that rivals the best of the best in the rest of the world while being stylistically Chinese. i.e Fog hill of five elements.
I found the below video an excellent summary of the situation.
Inventing a new style for the sake of inventing a new style is not going to work. It's like reinventing the wheel. There aren't infinite artistic styles out there. In fact, 99% of new styles artists try to invent, fail, because the sort of beauty humans appreciate make up a very small percentage of the latent space of art.
The Japanese were the first to discover the specifically Asian art style we now call "anime" and spent many decades developing it; and while it isn't the only art style Asians will appreciate, the Japanese have got such a head start in exploring the different branches of the style, that practically anything you come up with, some Japanese artist did it first. There's not much new under the sun in anime, and consequently very difficult to claim originality.
And I think the big revelation from Chinese and Korean companies, in the early 2010s, was to stop trying to be original, and instead just embrace the fact that, "yes, we're copying - so what?" Why should the Japanese be allowed to be the sole beneficiaries of their artistic discovery? Are Chinese the sole beneficiaries of gun powder or paper? The anime style is an invention like any other. That the Japanese had the fortune of being the first to discover it, doesn't make it
their culture. It's like saying animation is Western culture because the West invented it. Clearly the Japanese didn't think so, so why would we treat the anime style like it's intrinsic to the Japanese?
The rise and market success of Chinese and Korean made anime art / games changed the whole dynamic of the industry. It resulted in what we have today, where Chinese and Korean developers can carve out a space of their own, instead of being dominated by the Japanese monopoly over anime products. This is a better result than 30 years ago, when nobody consumed anything but American and Japanese animation, with all their biases, and Chinese and Koreans had to literally beg for better representation.
But I'm going to be greedy and say that what I'd like to see from here is more innovation from Chinese artists on top of the style they've adopted. Like I was saying earlier, Chinese anime
isn't and shouldn't be an exact copy of Japanese anime, because culturally and psychologically, Chinese and Japanese are
not exact copies of each other.
For one thing, the Japanese are far more interested in neoteny, which is why the most successful genre of anime in Japan is middle/high-school settings with under age girls. By contrast, Chinese, from what I've seen, are more attuned to elegance, hence the elaborate clothing designs, frequent references to traditional Chinese culture, and prevalence of historical fantasy and military settings.
That's the direction Chinese artists should take to make anime into their own style - focus on what is unique to the Chinese market and its aesthetic appreciation, and the rest will naturally follow.