I could go one step further: Build another open source OS that can run Android app but not Android. Many Chinese companies already tried it (non-open source though) before but been persuaded not to, I guess they're feeling a little bit different now.

The good part is, by building that OS, the domestic tech communities could receive a huge boost.

So far for Huawei, Google's blockage is partly useless. As long as Huawei can sell device globally, they can just build their devices in such way that allowing their users to load custom ROM into it without effect warranty, then their users can just use LineageOS (Huawei's Android UI is a crap anyway) or a Linux distro etc. (Maybe the first hackable phone from a major manufacturer)

BTW: In China, not a single one domestic phone manufacturer I know of ships Google service with their phone. So Google service is largely an non-existence.