China does not have a choice but to to do that. Two years obviously is not likely, but 5 to 7 years, for the majority of the supply chain of goods demanded by China to be relocated locally, that is definitely doable.I would be extremely surprised if China is able to reproduce the complete supply chain for these banned components within two years. I would be EXTREMELY surprised. These are very established companies that supply these components and there is a massive number of different components that need to be supplied, in addition to producing the equipment, operating systems, manufacturing practices that go into them.
This move against Huawei is no less than a declaration of war. If China does not mobilize it's entire society to reproduce these supply chains and protect its companies, then it does not deserve to compete.
China at very least has to show significant capabilities of being a able to produce a wide range of high tech products comparable in quality to suppliers from the US Alliance. This will make them likely resist US pressures that ate being placed on them not to sell high tech goods to China.
Make no mistake, the United States wants ALL its allies, which is essentially EVERY EU country, Japan, and South Korea to replicate the ban that the US has done to China. They are ALL highly susceptible to such pressure from the US. As such China has to actually aim for and demonstrate that it has the capability of replacing the entire supply chain domestically.