I don't understand how the guy controls anything. Even if say he has all the designs copied in China, Arm Global could just declare those are stolen designs and anyone that uses it without paying the global company directly would be in violation of that and could be sued (in other countries, if not China).
I think the only reason this comical and absurd situation continues is only because - like many tech companies before it - Arm continues to hope for bread crumbs in the "huge Chinese market" and accept being at the mercy of the CCP, even though this has proven to be a disastrous strategy for most other companies that thought like this. In the end, the government just gives your tech to the local companies, that end up dominating there, and maybe even globally later on, with your tech.