You’re right, I do have a very pessimistic outlook on this subject. I personally see this as an emerging battle of sorts between the technology sector of the West and China, but it may not be that dire. There may still be hope for cooperation and positive competition.
You’re also right about there being a large software development component that would be made less likely by a shaky future. Though I think that could be overcome by force and focus, and I have to admit, that is something I respect about the Chinese tech sector.
I am also pretty amazed in general with the progress that’s been made on these chips in such a short time, props to them for that.