First off, I've been living and working in China for 11 years, even founded my own software company and ran for 6 years, before merging with another company. So I'll comment on this one.
You took a very simplistic view.
An IT industry can not be built overnight, it took many generations to build up the experiences, the talent pool, the mind set, the mentality that people had on software (A lot of Chinese people, especially those in the power to make decision on IT purchase, have a very different mind set on software/service values), etc, etc. I've been here for over a decade now, although there's been some progress in software engineering here, mainly in the few big Internet companies such as Baidu, Alibaba, Tencent, etc, there's not much progress. Enterprise software? Frankly, due to the mentality toward the values of software/services, there's not much changes over the decade. The local software companies in the field are extremely small, compared to the western giants such as IBM, HP, SAP, Oracle, etc. The enterprise software, and that includes systems acquired by government, is dominated by these foreign companies. They took the big profit, and leave the hard work to the locals to slave over. This situation is stupid to all parties. Very stupid of the government, especially to let this kind of shit happen over two decades without doing the proper thing. Very stupid of the foreign companies, as they could have made their life easier and made the cake larger. Very stupid of the local companies, as they are slaving to death, as most projects are losing money for them. And as a matter of fact, a lot of the local IT people, the smarter ones besides that, are giving up on a career in IT, they make more money selling pancakes and without the stress and overtime.
Second of all, if these foreign companies are not trying to share, they will fight over a cake that will never grow. Look, none of the Internet biggies, the fastest growing sector, are buying anything from them. Their markets are in the enterprise software (and government sector). And these markets are not growing, and if you look seriously into the numbers, these companies are making their money by selling hardware and to a certain extent, software licenses, which are quite small as compared to the hardware portion. And software licenses are getting smaller still, as more and more open source softwares are made available. And selling services? Haha, don't make me laugh. Service is money-losing on all fronts. As the policies changed, if these foreign companies are not trying to change, their cake gets smaller and smaller, and their profit will be significantly squeezed, as they would have to sell via local distributors.
Thirdly, even if they share, you are not going to think that they will share their crown jewel, are you? They will probably just play the games to comply, to make sure their cake is still there. These companies are exploiting like crazy, without actually investing much here. They have a very strong sale department, and very small tech support, nothing technically challenging. The technical works they do here? Could be done by any code monkey in any country.
Fourthly, you might want to look at other industries, such as the car industry, for example. They had shared something, but look at how much more they have earned back? Just take a look at the chinese branch of GM, Volkswagen, Honda, Toyota, etc. They only share the parts that they do not have the competitive edge, or are on the edge of losing it, and still keep the core technologies. They think long term. In 15 years, the car market became the largest one in the world. Sure, they have now more and stronger local competitors, but so what? Their cake is so much bigger, they made so much money than before. Try to imagine the enterprise software market, if you can. If we can make it like the car market, this is going to be gigantic. I can tell you that most Chinese firms, even the big ones, have very little IT deployment.
Anyway, my point is, it is stupid for a company, especially a technology company, to invest only in sales team and hope to stay profitable forever in the market. Sure, it's a global economy, but services are local. You are trying to sell technology and services, you gotta be local. You gotta to think more long term than that.