I hear you are not actually addressing my argument? Stopping Windows Updates would do more short and long-term damage to the Chinese economy than embargoing rare earth metal exports ever will.
As for proprietary software that runs on Windows, these would need to be handled individually. The simplest solution for them is to use old versions that need no connection to the outside world to function. There might be some risks involved but I think they will rapidly adjust.
In my opinion, China and probably other countries currently have stolen code for every major proprietary software product. They just won't use it openly or officially because of IP laws. In a war, all that will go out the window. They may not have quite as many competent people to throw at fixing issues with that software, but they will do what they can.
What about scenarios short of a war? Well, a lot of what China does for us involves IP. If they stop respecting a bunch of our IP and stop exporting things that only they currently make, they can cause tremendous damage. Go look in a store and see what is made in China. American cars currently rely on Chinese parts and materials. The Chinese can stop exporting steel if they want. They will certainly take damage but you seem to not understand the extent of the damage they can inflict on the West. Windows Updates won't mean a damn thing in the long run, or even the short run.
2. Why do you think the pirated versions of Windows largely used in China are getting updates?
3. What do you think happens when patches aren't applied to Windows?