"At the same time western companies setup factories in China causing massive capital inflows." This was an intentional policy to split China off from the Soviet union it's well documented the same thing never happened for other countries.

"You're not gonna tell me Chinese are smarter, are you?" No I'm not, but I will say culture does play a massive role, China was not a bunch of roaming tribes living off the land. Turn the clock back a couple of hundred years and it would be peak civilisation. China was literally thousands and thousands of years ahead of somewhere like North Sentinel island.

Calling China a developing country is actually pretty absurd, it's much more like a rebuilding country. GDP was the only undeveloped part because the communist party was terrible at running the economy. Art, science, poetry, fashion, literature, philosophy, culinary arts it was all present and pretty cutting edge up until the communist party ruined things.

It's the same reason Japan, German and the UK bounced back after WW2 except instead of it being war ( Japanese invasion and Chinese civil war aside ) it was self inflicted.

Also I don't think China has escaped the middle income trap. China to this day has horrible wealth inequality and pretty bad social mobility. I actually think this is an intentional strategy they have an underclass of cheap workers for a reason, the government doesn't force a high minimum wage for a reason. Then they have a rich upper class that gets to study in the west and buy a Porsche something that is completely unreachable for the rest of the country.