Yes, a good, fair summary by LAX. The only thing I would add is that before Charlie Cornish's more direct comments, were there not a couple of quotes from MAN indicating they were in talks with a number of Chinese carriers?
That was in response to being asked specifically about the Hainan story.
Also, if Air China do still hold the rights for MAN - PEK and it is only 1 airline per route, shouldn't that fact have been known to the UK Government and MAN? Perhaps it was and that's why MAN were not just focused on Hainan.
Just to speculate further: while it would usually be quite normal for an airport to be in discussions with several (competitor) airlines over potential new services, would this be the protocol when dealing with China? If MAN were talking to say Air China as well, and for the same route, it might just suggest they didn't have full confidence in the Hainan negotiations coming to fruition even if that airline was regarded as the front runner, especially if it was Air China that held traffic rights.
Nevertheless, LAX's scenario that it could be a stalemate over conflicting traffic rights in the two countries sounds feasible.
My guess is that Ken O'Toole could be announcing a new long haul route before China but it's very unfortunate MAN finds itself in this position.