Well, the problem is that, China has likely invested and spent, hundreds of billions of dollars, and millions of man years, on American technology products.
They have built their own applications and business processes, on top of American technology systems.
American companies have benefited handsomely from this engagement with China. Their stock prices reflect that, in how much they earned from China, and how much future potential they will earn from China.
What the USA government is doing here, is saying that America is no longer reliable. Essentially, that they can take away their products on a whim.
This puts the onus of the risk on China. Why should they continue to spend and invest in American technology, when it can all be taken away, and their applications on top of it will be useless.
Imagine if a Chinese company spent 5 years, and millions of dollars, to build an application on top of the Microsoft Windows framework. Then one day, the American government says: Hey, we will no longer allow you to use Windows.
Now, your expensive program, is wasted, and is now worth less than a paperweight. Even a paperweight is more useful than your program.
Will this happen? Who knows. But it is clearly a risk. And it must be a violation of some WTO trading rules somewhere. Because something like this, is clearly a monopolistic and predatory action, akin to an all-out economic war, designed to force the Chinese to their knees, and which would force the Chinese side to counter-react to.