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Notes -
I also think the Tanner Greer theory about Chinese fear of US soft power is relevant.
The basic thesis (see for example this blogpost but it is a theme of much of Greer's work) is:
The Chinese regime cares about its own survival a lot, as you would expect
The Chinese regime is more likely to be defeated by American soft power (as the USSR regime arguably was) than by American hard power - there is no scenario where America (or a broader Western alliance) acquires the ability to enforce regime change in mainland China militarily. In fact, American (or western more broadly depending on your point of view, but probably almost entirely American) soft power is the main threat to the survival of the Chinese regime.
China spends a huge amount of resources (e.g. the Great Firewall) defending itself against American soft power, but as long as China has to do business with the rest of the world the potential effectiveness of this approach is limited.
The nature of American soft power is that America can't turn off their soft power threat to China, even if they wanted to.
Accordingly the Chinese regime will not feel secure as long as America looks like a powerful, attractive alternative, and Chinese policy reflects this.
All this applies whether or not China wants to spread their system - or indeed whether America wants to spread theirs. Freedom wants to spread even if individual free countries don't care about spreading it.
To relate this back to the chip export issue: even if you don't believe in the immediate threat or power of AI (you deny that the sprint finish scenario is going to happen), it seems obvious to me that there are intermediate abilities unlocked by advanced AI (and therefore enabled by advanced chips) that can threaten either side in this conflict. Cyber security threats are maybe first and foremost, and are of immediate relevance in the ideological/soft power battle. If AI advances to the point of rendering non-frontier AI driven cyber security obsolete, then how would that impact the ability of the Chinese regime to maintain the great firewall? What if advanced AI was able to hack or manipulate the censorship system, or edit broadcasts, or enabled manipulation of the Douyin algorithm? These kind of capabilities alone (if you assume an attack vs defence paradigm) would justify interest developing not just advanced AI systems, but systems that exceed the opponent's in capability. Chip export restrictions would then be relevant in this scenario.
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