I don't think there is not top talent in China. All the women bettering WR in 1993 (and when we speak about 8'06" and 29'30", also with doping, we need to have a lot of talent) were Chinese.
The two most important problems are :
1) No recruitment, because no interest in running. How already I explained, Provinces with 40 million people don't have any club, so they can have a maximum of 50 athletes, and no more than 5-10 in middle and long distances. So, the number of runners is absolutely not proportioned with the number of people.
2) No competitions, and in all the Asian Countries this is a common situation, with the exception of Japan and South Korea. When I was in several occasions in the Asian area as lecturer of IAAF, I discover full Countries with athletics calendar of 2 competitions only in one year (such as North Korea), or with 3-4 competitions (like India) in the worst hours of the day (from 1pm to 5pm, with 40 Celsius degrees). Nobody in those Countries has any idea about technical solutions for achieving good results, and, something worse, don't have any interest in technical results.
So, I don't think it's a simple matter of talent. Countries with more than one billion people, with altitude and every kind of enviroment, in my opinion can produce top runners, with right mentality and right organization. The fact is that they don't have nor right mentality, neither good organization.
In short, there is no interest, and this is the main reason because there is not athletics of top level.