Regardless of what is going on there politically currently, they are a growing economic power. That makes them the proverbial 800 pound gorilla that people are increasingly afraid of pissing off for fear of financial consequences. They have one seventh of the world's population. It's a huge market that simply cannot be ignored.
True, if your motive is profit above all else.
Otherwise, it is quite simple to ignore China's demands. Create the products, services, etc. that you want to create. If people in China buy them, fine. If China says they'll buy them if only you do Thing X, if you do not morally agree with Thing X, simply do not do it.
There are near limitless numbers of businesses that are economically viable without catering to China's demands.
You can be a peacenik conscientious objector who refuses to take sides in the war and still get caught in the crossfire while minding your own business and trying your hardest to stay out of the fray.
also, this is not the first time the gaming community went against a company. and tbh i am not sure some young ones don't know or care much about politics of what's happening in the east. one of their own got sacked. that's all that matters.
so yes, they probably shouldn't have banned that player.
Saying they created this situation is a little like blaming a casualty of war for living in the country they were born in. China exists and it's a large country with growing power that has fundamental cultural differences with the West and always has.
There may be better and worse ways to respond, but we have to recognize that everyone is, to some extent, just a bit player on a world stage where many other forces are in play. Not everything that happens in our lives is a thing we directly caused.
It's common to take it for granted when the existing world stage benefits us and wonder where we went wrong when it shafts us. Both views are only partial explanations at best.