True, but who is going to put in the money? It's not a foregone conclusion that RISC-V will get enough investment to ever be competitive with state-of-the-art Arm or x86 chips.
Suppose Facebook are tired of paying a premium to Cisco et al and decide to commission their own network equipment. That stuff doesn't have to be competitive with x86 on single thread performance, it just has to be reasonably power efficient. So they take some existing free RISC-V core and make a few improvements to it and use that. But they publish the improvements, because they're not actually trying to be a hardware OEM and if someone else takes their design and does the same thing, they know they get those improvements for their next generation.
So then that happens. Google want the same thing and make more improvements. Netgear use it in a consumer router, and they're not big enough to improve the chip, but they ship it in a product that sells a million units, so widespread use causes the community to optimize software for it and fix bugs. At this point Samsung or Qualcomm realize they only have to improve the SIMD support a little and they can stop paying ARM for their low and mid range phone SoCs. But if half of Android devices are now RISC-V and Qualcomm are already designing the high end cores themselves, why pay ARM for that either? So now it's in the high end phones, and someone starts putting the same chip into laptops.
All it really takes is for enough people to not want to pay ARM to create an ecosystem that allows everybody else to do the same thing. The free designs eat the low end of the market and then the high end uses the same architecture because why wouldn't it?
I don’t know if it will happen, but it would be extremely funny if Intel cut off Arm and went with RISC-V. (False reports of the death of x86 have been around for decades, but it is bound to happen eventually, right?)
Can't write off the first car only able to go 15km/h because your horse is able to do 40km/h.
And that probably only happened because Apple co-founded ARM.
Most of ARM's design work is done in the US (Austin), India (Bangalore, Noida), and China (Beijing), though ARM China should basically be treated as a separate company at this point due to corporate shenanigans.
That said, in the chip design space (which tends to be concentrated in the US, Israel, India, and China), RISC-V has become much more popular for commodity embedded usecases because of the less restrictive licensing meaning better profit margins, which is allowing fabless chip startups to potentially leap ahead of ARM
That's other people being short-sighted, not China doing anything wrong or sinister.
There are in fact quite a lot of exciting non-Chinese developments being announced recently, including at the RISC-V Summit that is on now, but those things will take several years to make their way in to the market.