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Yes, they apply the mandatory conversion and have gotten a license for the software to do this from the Chinese authorities. This wikipedia article has some mor

• Slartie 3y ago
  I've been to Shanghai and Beijing in 2010 or so, and I vividly remember that my iPhone 3G (that I jailbroke and unlocked to be able to use local Chinese SIMs, oh, those were the times...) didn't work at all for the purpose of getting around, because Google Maps GPS locations didn't match up with the map. However, there was some obscure third-party mapping software available in the app store (I think it was even the official one, not Cydia) which basically showed a Google Maps view and drew the GPS dot onto it by itself, applying the conversion first and thus fixing the display problem. So at least back then Google Maps apparently didn't yet convert the GPS coordinates to the weird obfuscated Chinese system. But it was a big nuisance and took me a while to figure out. For the first days I thought my jailbreaking activity would have broken the GPS chip or something.