No it wasn't, it absolutely was not "one of the big factions". They're mentioned as one of the nations involved, but there's no sense they're one of the "big boys" (also it's Shou Lung specifically, not Kara Tur in general). Further they're called out as an example - apparently in general "oriental" [sic] nations throughout the universe have spelljammers, whereas the uncouth Western nations tend not to (ahhh good old '80s and '90s "it's not racist if we say they're better than white people!!!" - the attitude that gave us "WoD: Gypsies" and "Kindred of the East").
As an aside, I love/absolutely hate this entirely bonkers idea that throughout the universe the "western" and "oriental" [sic] paradigm is repeated. Good grief. All you're managing to do here is point out Spelljammer managed to include some old-fashioned lighthearted racism.
Yeah, because took it from Spelljammer, you're just proving my point for me.
Again busily proving my point about the FR taking Spelljammer and deciding it was "FR property" lol.
Spelljammer 2E was designed to "extend" every campaign setting, including, explicitly, the FR and GH, but the FR is the only setting that decided Spelljammer was part of it, in the inverse direction. That sort of "all-consuming blob" factor with the FR is of course part of why it's so successful. It's like, to paraphrase Rorschach, the the FR isn't locked in with your meta-setting, your meta-setting is locked in with the FR!".