> China could technically spin off their censorship functions to a privately owned company that would wholly depend on the state-issued license to operate and would keep doing exactly the same thing.

I think that's exactly what's happening for certain online services eg iCloud[1], AWS China[2]

[1]https://money.cnn.com/2018/02/28/technology/apple-icloud-dat... [2]https://techcrunch.com/2017/11/13/aws-exits-china/