The Chinese is most likely doing this as a response to the US banning ZTE and Huawei telecom products in the US. The US government is accusing ZTE and Huawei of building backdoors and other security concerns into their hardware, so China wants to hit back with something equally annoying. China is basically saying that's cool, we can screw with your companies too. Especially since China is a huge market to cell phone makers that most US companies have yet to really tap into. And with a huge growing middle class, the amount of profit for products like iPhone and Android based phones is huge. China is basically holding the iPhone hostage to get better treatment of its companies outside of China.
The problem with that is the Chinese market craves iPhones and the US market couldn't care less about ZTE and Huawei products. All that'll do is piss off the Chinese with disposable incomes, "the growing middle class" and Chinese leaders will get voted out of office.
Oh wait. It's a dictatorship.