It's speculated that the Chinese government is concerned about how it will track users of the device due to its eSIM.
The benefit of a device carrying an eSIM is that, with software, users can choose a telecom operator and a communications plan. But in China, that new system raises the question of how carriers and regulators can track the device user’s identity.
“The eSIM [system] isn’t mature enough yet in China,” one analyst said. “The government still needs to figure out how they can control the eSIM.”
China Unicom began offering cellular service for the Apple Watch on September 22nd and cut off new subscriptions on September 28th, saying the feature had been offered on a trial basis.
Apple has now issued a statement saying, "We were informed by China Unicom that the new cellular feature on the Apple Watch Series 3 has been suspended."
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