The hypothetical seems silly to me.
If China manages to do both of those things it would be due to a huge amount of focussed and iterative innovation within a closed loop in China that will already have been well under way for many years.
If we suspend disbelief and ponder that that might be on the verge of being announced then availability of FOSS would only have been a small part of that many years-long process.
The other two parts being:
- a stable, focussed and well-funded ecosystem of primary research which has been a key strength of China for years but which of late has been sorely disrupted by China’s increasingly autocratic internal policies under the excuse of Covid
-strong international flow of the materials and skills required to manufacture and deploy the foundational technology at scale which sanctions have been effective in targeting.
Trying to limit the spread of FOSS would almost certainly create an environment in which the incentives to contribute fall away entirely (would you work for free on a software project if you might be subject to a Mcarthyite witch hunt for your troubles?).
The big winners would be Microsoft, Oracle etc. the big loser would be the speed of innovation in the western world which in all probability would chip away at a key benefit of western world (relative) openness over the Chinese system and gradually achieve the opposite of the planned outcome.