You cannot do business in China without doing what they tell you. Period. Either you do it or you leave. I work for a big company (you would all know) and we have a large business unit in China, they own 52% of it. They decide what goes in and how customers can use it. We don't get to decide anything without government approval. It's so easy to claim the West shouldn't do what the leadership of China wants in China,…
And if you make choices they have consequences. Those consequences include that people in the west will lose respect for your company, complain about it, patronize competitors, propose laws to punish it, etc.
If that puts the company in a bind, good. They're a multi-billion dollar international corporation. They have to choose between morals and profits a thousand times a day. It should be as hard as possible for them to make the immoral choice. And if they make it anyway, it should cost them something.