It's really unfortunate that abiding by local laws and regulations is considered unethical. But even if we assume that there is no legal way for a company to operate ethically in China, is the world meant to close our borders to them entirely? 20% of the planet lives there and we do business with China every day when we buy something manufactured there, but do not feel morally required to boycott them on account of their government.
Edit: to all the comments saying I equated lawful with ethical, please read my comment again. In particular the second sentence in which I clearly distinguish between the two.
Edit: to all the comments saying I equated lawful with ethical, please read my comment again. In particular the second sentence in which I clearly distinguish between the two.