There are plenty of good reasons to refuse to cede to CCP demands but this makes no sense.
The only tech company that were able to mount serious resistance against a serious data access request by the US government were Apple and a couple of things:
1. They are a trillion dollar company.
2. They are primarily a hardware company, not a cloud services company
3. There is no guarantee (and I would argue rather unlikely) that if the FBI were unable to break the encryption of that phone independently that they would not have kept mounting pressure on Apple till they cracked.
It's a complete fantasy to believe that any individual or company has guaranteed data protection in the US or indeed most nation states. Once the government really want your data, they will get it with enough time.