Invite them in. Launch their satellites for them, at 400km. Give them cash or territory. Give away the farm. How doesn't matter. What matters is that we start coexisting at 300-500km, and we mutually taboo launching large amounts to altitudes much higher than that.

There is no stable Mutually Assured Destruction Nash equilibrium here, if either of us does this thing it causes dramatic harm to both.

Not regarding that as a worthwhile goal is "mineshaft gap" thinking - a zero-sum mentality entirely ignoring our collective advantage in order to pursue competitive advantage.

It is perfectly feasible to run a Chinese constellation alongside Starlink sharing the same space, orbitally. Very low orbits are self cleaning.

I think OP is suggesting US concede to sharing 500km orbits that SpaceX has disproportionately squatted rights to, since current international law is first come first serve. Where concede is to rejigger international law to increase density of 500km so others wouldn't have to go higher, i.e. PRC mega constellations going ~800 because ~500 mostly taken. Or in ops suggestion, free for all. This is more costly for US since it saves entrants from going extra 300km, but imo proximity also greatly enhances chance for friction... i.e. if everyone chilling around same plane, and it's going to get magnitude more croweded, expect a lot more overt/hidden space war assets there to trigger kessler.

basically, it sounds like the U.S. should not treat China as a competitor and we should cooperate. this insane hypercompetition for literally no reason (other than US capitalists wanting to remain dominant) is going to destroy us all.