I think you are misunderstanding. Apple moved Chinese iClouds to Chinese firms. So yes, Chinese iCloud users in China will be under the full surveillance of the government. Which they always have been. But that has no impact on anyone outside of China.
Dragonfly is a censored search engine, not a user data base.
The Chinese firms were nationalized by the government in July, giving full access. This isn't generic surveillance but complete ownership. First source listed in my original comment.
Dragonfly was complying with China's firewall, because clicking broken links in search results sucks, but it was also linking every search query to the users phone number and sharing with the Chinese government, which is what Google employees revolted over.
Dragonfly is a censored search engine, not a user data base.