Only in movies. A lot of people (including poliicians deciding about treaties and budgets) do not believe there's really anything at stake, and instead think of space exploration as a very expensive nerd hobby with some possible military applications.
All space tech is necessarily dual-use military. I'm certain the concern is that space launch cooperation with PR China will result in unintentional transfer of militarily relevant technologies.
Also, China is responsible for the largest single space debris generating event in history, from the intentional destruction of Fengyun-1C in 2007. That kind of thing doesn't matter to the politicians so much, but it was kind of a dick move, and had all the appearances of gratuitous saber-rattling. Space is too important for nationalist dick-measuring contests in LEO when it is already perilously close to Kessler cascade.