Any company selling goods or services in China will have to do so under China’s rules.
Exactly.
And anybody who's been around since the early 90's should remember that public strong encryption was ILLEGAL IN AMERICA, just like it is now in China. The US Government considered it a "munition", so making it public, and thus "exportable", was a crime.
Doubt it? See Phil Zimmermann and PGP. The US Government tried to put him in jail for years for making good encryption software available to the public.
People criticizing Apple and other companies for doing business in China according to the Chinese laws have short memories, and should look at what American laws were like only 25-30 years ago here.