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First they are not complying in China. Second it is sheer arrogance if not outright racist crap that China's demands are unreasonable but EU's reasonable.

Seriously EU folks need to come to down to earth sometime.

I would venture that Apple is going to go with something fairly different in China with Chinese partners. This is different from 3rd party access because they aren't opening up their phones, it will just be a fixed 2nd party solution (like they do with Google, except Google -> Alibaba, Google Cloud -> Shanghai Water corporation or something like that).

It's not launching in China either.

They are not complying with China’s demand either AFAIK.