Replace every instance of "PRC" with "U.S.", DeepSeek with OpenAI/Anthropic, and replace "U.S." with any other nation, and maybe remove the last sentence. How does it sound now? Both nations may as well just say it - "we're banning it because they're our closest competitor".
The difference is that local US companies have agency to refuse government overreach while Chinese companies are weaker in this regard. Chinese companies are more vulnerable to its govts pressure.
If I were China, I would ban US models from being used by my government for the same reasons.