Tesla is quite notable as the only foreign automaker which China has allowed to operate independently in China. All of the rest of them were forced to joint venture with 51%+ control being handed over to a Chinese domestic company. So, really it's pretty surprising that they haven't done that even before Musk owned X.

But regardless, there is a huge difference between a request and actually having managerial authority -- the most obvious being that someone with managerial authority can simply do whatever they want without trying to compel someone else. Also, X, being subject to US law, must comply with that no matter what consequences Musk is threatened with. So, any threats may have limits in what they can practically accomplish.