How is this news? I work in the digital mapping world and there everybody knows this. You cannot even get the data out of China, all data has to stay within China and if you want to do map business in China, you can only do it through a joint-venture with a Chinese company.
[edit] BTW: India is similar, they are not scrambling the map, but it cannot leave the country either. So as a map-maker you have to have a local company there in order to do business.
Requiring legitimate incorporation in a foreign country in order to do business there (typically through partnership with a domestic firm) is also not unique to China or map making.
No, but doing so in order to ensure state control of information for propaganda purposes is certainly a feature of tyrannical governments, China being a particularly strong example.
Getting detailed maps in lots of coutries is difficult. Lived in Ethiopia for a while, which up until 1993 was governed by a communist regime. Around 2000 it was still law that in order to get maps on a 1:10000 scale you needed a government license/permit and could only be bought at the "Mapping Authority". 1:100000 maps on the other hand were available everywhere.
Lots of other countries have restrictions for instance on key bridges and other infrastructure, disallowing access, pictures, stopping, etc.
[edit] BTW: India is similar, they are not scrambling the map, but it cannot leave the country either. So as a map-maker you have to have a local company there in order to do business.