As much as Apple wants access to the Chinese market, it would (presumably) draw a line at some point where it would (presumably) have to choose between that market and the US market, if only because the latter is both its legal domicile and the source of most of its talent.
Version A: CCP wants to exploit the hash database, there are lots of ways to do that, bullying Apple is one, any other way gives Apple a "we are looking into it" excuse. "We must comply with local laws, but we will not change our software bla bla."
Version B: CCP wants to exploit iOS, only way to do it is to bully Apple, this forces Apple's hand and very possibly Apple moves production (not just sales) out of China because they no longer trust they will be offered "plausible deniability."
I'm sure there are lots of reasons for that absurd cash reserve, but my best guess is it's to cover the eventuality of B. above; Apple talking about that publicly would be tricky.
https://www.cnbc.com/2020/07/30/apple-q3-cash-hoard-heres-ho...
As a matter of fact, I am not sure that would be possible: It might well be that no other country has the capacity (machines and labour) to churn out that many iPhones. Would be interesting to hear if anyone has insight on that. (Tim Cook presumably knows...)
I admit it's total speculation, but I think the massive cash reserves are for that: to weather a disruption in production facilities and move production to a more US-friendly location.
If they add some new hashes I presume that would be harder to spot and isn’t going to be advertised
A few bytes changed in a binary blob that would enable a backdoor would be almost impossible to detect.
Nobody really knows what the blobs do. They likely have paved the way for Stingrays and other devices.
If Apple really wanted to they could secure the iPhone. Just offer a 2x higher bug bounty than any government and things like stingray would not work.
Although I think recent iphone designs don’t give the modem DMA so it’s still better than Android but I wouldn’t consider it secure.