I'd say it's an unnecessary dilution of national brand power. I know people who refuse to buy things directly from China, yet are perfectly happy buying the same items through a western distributer. That price delta is directly measurable brand equity that ends up as taxable money spent in western economies with no real value add.

Pulling this crap only incentives China to develop their own silicon. Since the west can't compete on manufacturing cost or quality, Chinese products will continue to dominate. But the importance of incorporating western technologies will deminish since there will be no legal alternative. The end result is just plain brand dilution, since not using western technology will become the new norm.

I'm not really personally concerned, the west will learn sooner or later that it actually needs to build something to remain competitive. A service based economy is simply everyone serving each other coffee, while gradually eroding existing equity so we can keep buying coffee beans.