I bet the Chinese government is extremely happy that a western company was dumb enough to 'license' their GPU tech to a Chinese company.
Imagination Technologies is owned by a Chinese private equity firm. There were rumors of a power struggle on the board, with appeals for the UK government to intervene, as terms of the sale agreement (involving IP-transfer, I think) under which the UK permitted the acquisition were allegedly being violated. I haven't followed too closely, but if you like that sort of intrigue, you should read up on it.
I still blame Apple for being too cheap to just buy Imagination, outright. I don't know what happened, but my guess is that Imagination overplayed its hand and Apple didn't like being strong-armed to overpay for a key supplier. That would set a bad precedent for their other suppliers.
BTW, AMD and Nvidia have been doing some design work in China for like 15 years now. I think there's at least one entirely homegrown Chinese GPU and there will probably be more. The Chinese don't really need tech from Imagination to become competitive in this market. They would get there, either way.