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We stand to lose a lot more from a space war, right now, than anyone else. We (US/west) hold the lion's share of space commerce and orbital launch capacity. "Earth orbit is free and open for everyone" is more than Star Trek idealism—it's a precedent we've set that benefits us, especially.
Not a satellite expert, but I understand GEO clears out relatively fast (~decades), because of those 3-body perturbations,
https://www.agi.com/blog/2020/07/geo-satellites-don-t-decay-...
- "Launch their satellites for them, at 400km."
No reasonable person would help their adversary build powerful weapons that could immediately be used against them. The point of satellite constellations—Chinese or American, either—is to create undeniable, high-bandwidth communications for armies; to create real-time (as opposed to sporadic) satellite imagery for armies; to create, in short, an overwhelming situational awareness advantage in a conventional war.
- "Give them cash or territory."
We are not giving away countries.
"The most tempting orbits are the ones in upper LEO that permit them to launch fewer satellites."
Higher altitude => wider coverage => fewer satellites