It prevents NASA, or any company that works with NASA, from cooperating with China in any space venture.
I know the MO for China is to steal tech, and we'd have to keep a close eye on them.
We saw a lot of success in relationship building with the Russians in space with Apollo-Soyuz, Skylab, and the ISS. I think we should open a similar avenue of cooperation between NASA and the CNSA. We can set conditions for their participation in said venture- like obeying UNCLOS- or they get kicked out. They have some pretty interesting capabilities and keeping our friends close but our enemies closer, especially when it comes to the (re)emerging potential conflict region of space, is going to be important.