chinese policymakers can loosen domestic restrictions on innovation such as copyright and patent laws; then the laws in the us will only restrict us companies like nvidia. in large part this has happened, which is a major reason chinese companies (in both prc and roc) have become the leading organizations in a wide variety of high-tech fields, including solar panels, cell phones, electric cars, nuclear power, and microelectronics
your nvidia analogy predicts that gcc engineers and linux kernel engineers would have terrible job security, since anyone who needs a gcc backend or device driver written can hire literally any programmer; there are no legal restrictions. but in fact this seems to make the barriers to entry higher rather than lower. they're just in the form of 'human capital', knowhow, rather than in the form of the assets of a company
also, you may not be aware of this, but tsmc is a chinese company, and it's already left the us behind. sentences like 'The last thing the US wants to see is for China to close the technology gap on this stuff.' reflect wishful thinking that the technology gap is the other way around from how it actually is