Pronoun ambiguity

[Mo2men]

China's vast network of dams has long stood as the country's primary source of renewable energy, but its interest in building more large hydroelectric generating stations has waned in favor of burgeoning solar and wind industries.
A. has long stood as the country's primary source of renewable energy, but its interest in building more large hydroelectric generating stations has

B. have long stood as the country's primary source of renewable energy, but their interest in building more large hydroelectric generating stations have

C. has long stood as the country's primary source of renewable energy, but interest in building more large hydroelectric generating stations has

D. long stood as the country's primary source of renewable energy, but its interest in building more large hydroelectric generating stations

E. have long stood as the country's primary source of renewable energy, but interest in building more large hydroelectric generating stations has

OA: C

Source: Veritas

[spoiler]Veritas official explanation: Two decision points should stand out to you here: the singular/plural decision between "has" and "have" at the beginning of the sentence, and the pronoun decision (its vs. their vs. omit) after the word "but." One helpful piece of advice: when you're given a choice to omit a pronoun on the GMAT, the omitted version often cleans up a pronoun reference error. As such, this should be a primary decision point for you. Here, the subject of the sentence is "network" (China's network of dams), and so "its" as a pronoun would refer back to the network. Since the network isn't what would have interest in building more (that should be "China"), the inclusion of a pronoun is illogical.

My 2 questions are:

1-Is not clear from the context that 'China' will have the interest? why is no it the right answer?

2- is the following correct:
Napoleon's plan was great but his tactics were obsolete. [/spoiler]

Thanks

[GMATGuruNY]

A: China's vast network of dams has long stood as the country's primary source of renewable energy, but its interest in building more large hydroelectric generating stations has waned in favor of burgeoning solar and wind industries.
C: China's vast network of dams has long stood as the country's primary source of renewable energy, but interest in building more large hydroelectric generating stations has waned in favor of burgeoning solar and wind industries.

Both of these answer choices are fine.
In A, it is crystal clear that its (possessive) serves to refer to China's (a preceding possessive).
I would ignore this SC.