That’s a take I see often, and it always overblows the direct personal threat while understating the more abstract societal one. A Western AI company might report you for plotting a murder or a mass attack, but that’s not the issue for most people. Mass observation of what society thinks deep down and manipulating it with that data is a problem for both, and maybe more so for external actors, since they don’t have even a remote reason to care about your well-being.
You’d maybe want to counter with something like 'But Google/Amazon/whoever just wants to sell me stuff!'. What makes you think that Chinese B2C would just pass on that opportunity?
I feel that saying "they just want to sell me stuff" undersells what Western data markets do with our data. It can and is used in ways beyond just advertising.
I also don’t know that I agree with your idea that manipulation is a greater risk from foreign actors. You're right to point out that it can be a problem from either, but local actors have a particularly direct incentive to shape the opinions and behavior of the population whose views affect their own power and interests. I would not argue that means foreign actors are harmless, I just don't agree they are necessarily worse either.