Any large company can offer E2E encryption, as long as they don't have extenuating interests that could make them liable for the way I use their services. Unless Apple is harvesting my data on the regular, they should have no problem with me being the sole keyholder for my iCloud account.
I think Apple would need to ship a different OS in China.
Cloud services offered there must store data in the country and be operated by Chinese companies. (Apple is complying with this)
But Chinese companies HAVE TO assist the authorities in obtaining systematic access to private sector data. (This is not possible with E2E for backups and photos)
Apple already does this. All Chinese iCloud data is stored in a mainland datacenter, completely owned and operated by their government. Similar setups exist in Russia and France, where Apple kowtows to local governments at any cost to turn a buck in their hometown.
