On an ethical level, you're hurting people (e.g. Chinese workers) who had no part in the objectionable actions that prompted this. On a practical level, are there any cases in history where this has ever produced beneficial results?
But like you said, something more probably has to be done. Or else consider the case where the authoritarian model is perceived to have "won" and gets exported. That's also part of the ethical consideration.
Taking a measure such as gp's suggestion, which is at least fair and on face justifiable, may be the most just move.
And given the particularity of this case, history probably doesn't have a huge sample size. New contexts emerge, such as technological development. It's much more conceivable now than before that a small group of people could indefinitely hold power over the overwhelming majority.
China's is also hurting people with their behavior towards foreign companies in China in similar ways. Not to mention all the abuse china afflicts on it's own people with their power politics.
When someone is abusing you don't roll over, you create boundaries and walk away if they are violated.
And what is good about this practice is china has the power to stop this by treating everyone equally. Your not forcing things on china and you say you will stop when they stop.
