Over the course of the past month, Apple and China have shared headlines for two different reasons. First, we learned that the country's media deemed the iPhone to be a threat to national security, and mere weeks later, rumors surfaced that the country would begin banning Apple's products. Really, this is all very silly, but so far, Apple seems to be largely undeterred.
It is an interesting coincidence, though, that Apple's just begun storing iCloud data for Chinese users inside of China itself. While Apple would prefer to keep all user data in countries where the lack of freedom of speech and privacy are not major issues, this could be a step in smoothing out what the country thinks of the company. As a plus to Chinese users, this move will mean much faster iCloud performance.
Apple's chosen China Telecom to store its data, and it's made an effort to point out that the data is safe there. "We have added China Telecom to our list of data centre providers to increase bandwidth and improve performance for our customers in mainland china. All data stored with our providers is encrypted. China Telecom does not have access to the content."
Further, it's been said that the encryption keys themselves would be stored offshore, so while China Telecom may store the data, it's not going to be able to peer into it. This move might seem a little bizarre considering the fact that China might not want so much data encrypted, but at least with the servers in the country, it might quell some tempers.