They seem to be abandoning China, they are planning to move some 40% of the total iPhone production to India within the next couple of years, so China might not have all that much leverage.
The times have changed in the past 5 years, going all out on China is simply untenable. Leaving China on the other hand is positive PR.
Just because Apple couldn't officially sell any iPhones in China doesn't mean that the Chinese public would suddently stop coveting them. I don't think they'd blame Apple if it came to that.
