Yes from what I have read it was not replaced, but wasn't it even stated originally that the XM7 was supposed to replace the primary service weapon for close combat forces like the M4/M4A1?
Yes but.. The M4 wasn’t supposed to be the primary service rifle of the U.S. infantry. It was shoehorned into that position because after decades of use it was found more favorable and adaptable than the full size M16A4. This similar to what’s happened in the Korean War with the M2 Carbine vs the M1 Garand.
main problem was the weight so they had to get improved versions of the XM8 that decreases the weight, removes the foldable stock, shorter handguard and barrel. So originally the XM7 was supposed to fill that role as well but it couldn't despite the army advertising it as the "do it all" weapon.
The XM8 and M7 PIE. Basically Sig got feed back from the XM7 and identified a number of performance issues including weight however the XM8 had already been under a degree of development. Early prototype and proposals were under various names. SIG MCX Raptor, Sig Spear Assualter. Though those had 9 inch barrels.
The issue is who is getting the rifle.
The M4 wasn’t supposed to be an infantry weapon it was like the P90 meant for cooks, clerks, staff officers, Truck drivers, motor pool, Flight line . It was better than a pistol but smaller than a rifle. A weapon you could sling at an HQ that you could use if the enemy got inside the wire. More convenient.
Its mission expanded so combat support troops like front line medics, combat mechanics, Tankers, Artillery, forward fire directors. Eventually Infantry Team leaders got it then it squeezed out the M16. And then the U.S. Army moved to the A1 full automatic selector from the 3 round burst.
Now M4A1 is returning to that HQ carbine. The weapon slung off the guy who is moving around pallets of water, working a computer in the TOC, putting APKWs in the pods on the wings of Apache’s, the Doc, the Pharmacist, the cook. It’s a self defense weapon just in case someone got back to camp.
M7 is Intended to replace the rifles in the Infantry squad. It’s meant for the guy whose MOS is pulling the trigger. Front line infantry formations. Riflemen, Designated Riflemen.
XM8 is meant to be the guys who are supporting him but at close hand. The combat mechanics, Tank crew, Artillery. Medics, forward observers, possibly Infantry squad leaders maybe grenadiers and AT guys . Close drone operators.
XM8 and M7 PIE are improved versions of the M7 that’s what PIE stands for Product Improved. The Result of this is that the M7 went from 3.8 kg in the initial version to 3.4 kg With the XM8 being 3.3kg.
Again as far back as 4 years ago Sig was working on this. The Army seems to have felt it was worth it and adopted it yet has made it clear it’s to supplement the M7.
This is not what the PLA is doing and it’s understandable why. Very few countries bought in on using a separate caliber PDW. They may have looked at it but, Most just bought a SBR of their primary weapon.
The closest the concept of what is happening would be the NATO PDW concept just in reverse.
Where in the PDW concept specialist Sub machine gun type weapons were developed specifically to go to these second line troops. Using a proprietary small caliber cartridge. However in practice most PDW types just ended up in SOF or LEO hands as smaller more compact weapons or less scary than the big army rifle.