Except, the original idea is about “Understanding Chinese”, which is a bit vague. You could argue that right now the best translation programs “understand chinese”, at least enough to translate between Chinese and English. That is, they understand the rules of Chinese when it comes to subjects, verbs, objects, adverbs, adjectives, etc.
The question is now whether they understand the concepts they’re translating.
Like, imagine the Chinese government wanted to modify the program so that it was forbidden to talk about subjects that the Chinese government considered off-limits. I don’t think any current LLM could do that, because doing that requires understanding concepts. Sure, you could ban key words, but as attempts at Chinese censorship have shown over the years, people work around word bans all the time.
That doesn’t mean that some future system won’t be able to understand concepts. It may have an LLM grafted onto it as a way to communicate with people. But, the LLM isn’t the part of the system that thinks about concepts. It’s the part of the system that generates plausible language. The concept-thinking part would be the part that did some prompt-engineering for the LLM so that the text the LLM generated matched the ideas it was trying to express.