Puzzling
If a lot of the most expensive part of the project, the actual equipment to make 7nm chips, is there, but now things have stopped so as to prevent a functioning facility from being built around the equipment... if China is serious about having the ability to make advanced chips itself, I expect the Chinese authorities to make short work of any local dispute that stands in the way of so important a national goal.
Of course, the possibility is that this project is actually a hoax, a scam, and it's been detected before more than $2 billion was wasted on it. So I presume the Chinese central authorities will investigate that possibility before intervening. But if it isn't a scam, it's unlikely to be allowed to die wastefully.