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What’s to stop an American company from hiring overseas workers to write their American software? This is fairly common practice in the industry, and would expose similar security concerns.
Setting aside the point that there’s no reason that it’d be more profitable to do work domestically, there’s no general restriction on overseas software production. This is specific to China.
It’s mostly because their navigation systems are trash. Try to drive from Shenzhen to Peking and you get stuck hovering over U.S. military installations for a couple days.