FWIW, Apple does not treat US and Chinese users the same. If you have a Chinese mainland iPhone, you use a completely different iCloud that isn't even run by Apple.
The laws are different there and the only way that Apple could meet the requirements of the Chinese government without also weakening their product for the rest of the world was to cede control of iCloud there.
Apple likely conceded early on that China-based iPhones use China-based iCloud, and the Chinese government likely conceded that Apple phones will use the same OS everywhere, with region-based feature blocking being as far as they'll go in customizing the OS. Both have a lot to lose from the other party terminating the relationship.