I think the "if Amazon/Google/FB don't comply, someone else will take their place" argument is weaker when replacement requires a constellation of thousands of satellites.
It's probably all moot as China would probably simply halt Tesla Sales, as they are not bound by the logics of legality.
Musk's biggest risk in China is the CCP confiscating the Tesla factory in Shanghai.
Not with rockets, but maybe with lasers? What damage can a single one do? Could a country deploy them at specific orbits to have enough coverage to destroy a sufficient amount?