China doesn't care. They are banned from buying western AI HW or making their own AI HW at TSMC/Samsung. They are pouring hundreds of billions to the semiconductor ecosystem.
Huawei is trying to make establish domestic Ascend/MindSpore ecosystem, but they are limited by the SMIC process (~7nm). Amount of defects is allegedly rather high, but they are the only "official" game in town (other than smuggled NVIDIA cards or outsourced datacenters in Middle East).