in China as well as elsewhere was produced by pounding Iron over and over again over hot charcoal, thus mixing impurities into the iron.

Unlikely the first steel makers(Celts, Chinese and otherwise) realized what they are doing except by experience that the process made the steel better.

The Celts at that time were famous for their weapons and were able to hold off Rome for a long time.

Chinese did pioneer some methods of mass producing steel, but these are inferior products. The real fine materials were still hand made with age old process until the industrial revolution where Europeans refined those methods.