This is not a very accurate statement.
There were multiple mining pools that were inside China and a lot of hashrate (many of which was located outside China) connected to those pools. Pretty much the same thing is happening with pools in other countries like the situation that is growing in USA.
That is a big distinction to make because in this case China did not and could not "control" that hashrate.
China is a dictatorship, and as such they would have central control over whatever hardware physically resides in the country. Of course my scenario also includes other ways China (or some other big country) could achieve this by taking over other servers throughout the world through force or bribery.
As for the rest of your points, I think you're missing the fact that current holders of Bitcoin would be
held hostage by somebody who took over the network. You say "people won't accept it" but people... want their investment back if it is threatened. I think of China (or whomever) did a hard fork, brokers and individuals would be incentivized financially to go along with lest they lose their investment.
Don't get me wrong, I'm talking about a hypothetical scenario here, but clearly somebody who tried something like this would probably think through the ways that they would be able to get everybody on their side, even if reluctantly so.