Why?
You don't need a state of the art CPU to control a washing machine, or toaster. So this clearly isn't aimed at China's consumer or industrial manufacturing industries. You also don't really want that state of the art CPU in most vehicle, medical, military or avionics applications because you want reliability, radiation hardening, wide temperature tolerance, etc in those things. Sadly, it probably won't discourage China's rather aggressive monitoring of individuals -- both their citizens and probably the rest of us as well. They seem to be doing that altogether too well with less advanced technology,
Three things that come to mind:
1) This is an attempt to stretch China's R&D capabilities beyond their limits by making the develop their own domestic chip making technologies. Seems unlikely. There are an awful lot of Chinese. They have great respect for education. Their culture certainly does not discourage invention. Probably, they can make their own advanced chips in a few years. And peddle both the chips and the manufacturing tools to the rest of the world in the following years. But the CIA sometimes actually knows stuff that the rest of us don't.. So Maybe...
2) The intent is to deny China the technology they need for advanced decryption capability. That would assume that the Chinese equivalent of NSA/CIA can't somehow acquire a few dozen or a few thousand chips that are readily available in the rest of the world. My guess: You're kidding, right?
3) The intent is to at least somewhat cripple Chinese AI development. Perhaps. I wouldn't overlook the possibility that AI is a huge, shiny bubble and that discouraging AI development would be a huge favor to the Chinese.
Mostly, I think this is cosmetic. And kind of dumb.