Quite a bit of data in iCloud is E2E encrypted with device-based Secure Enclave. This doesn't seem like much of an issue.

Outside of China yes. If China is asking people to install Jingwangweishi (https://en.wikipedia.org/wiki/Jingwang_Weishi) under threat of fine or jail on Android devices, why do you think they would allow a simple, legal workaround to be "Just buy an iPhone!"

That is, China sets up elaborate domestic surveillance, deep packet inspection everywhere, asks citizens to install apps which backdoors their phones to scanning and logging, and all you need to do to thwart it is buy an Apple device? Does that sound like something they would willingly permit?

That would be like the US congress passing a law requiring Key Escrow, and every device manufacturer on the market complying, but if you just buy a Xiaomi phone, you can bypass it.

How likely do you think there's no special alteration to how iCloud encryption works in China?

Why Amnesty International is upset with Apple and the human rights abused with giving the data to the government.

https://www.amnesty.org/en/latest/news/2018/02/5-things-you-... When Profits Threaten Privacy – 5 Things You Need to Know about ...

But also removing the VPN software.

https://www.ft.com/content/ad42e536-cf36-11e7-b781-794ce08b2... Apple drops hundreds of VPN apps at Beijing's request