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Many routers still use MIPS, but several of the router chip makers (eg. Cavium) have bought ARM architecture licenses as well. Sony gave up MIPS after the PSP (PS3 is PPC, Vita is ARM).
The goal of the Chinese was to design a CPU from scratch. The fact that it implemented the MIPS ISA was more or less coincidental. It was only later that they worked out a deal with MIPS and got an official license. By designing their own chips they don't have to worry about American export restrictions, they know the only backdoors are the ones they added themselves and so on. Currently the chips are manufactured by ST Microelectronics, but you can bet they're working on that as well.