Protectionism with Chinese Characteristics It's a pretty common tactic. Cite "national security" or any other vaguely plausible reason to deny access to non-favored firms (foreign companies, and local companies who don't have the "connections"). If anyone complains, government spokesperson and 50 cent mafia generate lots of angry nationalistic crying. If another country retaliates, same spokesperson and 50 cent mafia…
US and EU have in the past blocked several Chinese companies (ZTE, Huawei, etc) for national security reasons as well. Would you classify them as protectionism? If yes, then why are you complaining? If not, then why are you applying double standards here?
I think the US/EU should retaliate on this particular policy for China specifically. This is way overdue.