To be honest, I think this is hurting China more than the US, and we're seeing that reflect in the Chinese economy. The US is also the stronger global superpower of the two for now — see, for example, Canada's arrest of Huawei's CFO under the direction of the American government, whereas I doubt Canada would arrest any American citizens at the behest of China — so I think the US has more of an ability to enforce its rules than China has the ability to enforce its desired alternate set of rules. Picking a fight with the US also means picking a fight with most of the US trade allies, which are the richest countries in the world by far: nearly half of the entire world's GDP is generated by the US and the EU alone (37 trillion out of 80 trillion global GDP); and that's not counting heavy hitters like Japan, Canada, Mexico, and South Korea. I don't see a lot of win conditions for China on this one.

IP theft is illegal in pretty much the entire industrialized world. China's big, but it's not bigger than everyone else combined.