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Loongarch is a few years ahead of RISC-V atm. the fastest RV cores are comparable to ARM A53 (Raspberry pi 3-ish) whilst Loongarch is comparable to Intel Core 10th generation.
I think its a sunk cost thing. Loongarch was set in motion before RISC-V International was established in a neutral country, and now they'd be giving up a faster proprietary ISA for one that's much slower atm.
The fact Alibaba is putting their money on RISC-V is probably enough of a sign that Loongarch will likely have a short-lived time at the top of the Chinese DIY processor stack.