China doesn’t really care what non Chinese citizens think. The government is more afraid of its own citizens starting an uprising.
The riots in Hong Kong saved the CPC. The people in Mainland China were already starting to get upset at the government because of how the trade war was affecting the economy. The implicit contract being the people won’t rebel if the economy is good.
Luckily for the CPC, the Hong Kong riots came along and now the government is able to use that as an excuse to bolster patriotism.
So naturally they need to be “tough” on the NBA, Blizzard and any other company so as to not lose the people’s support.
> How they've (mis)handled this will be studied by business and PR students for years to come.
It really depends on their goal. Reading the Chinese gaming forums, everyone is praising Blizzard for their “fair” stance and saying they will spend more on them.
So if this actually helps their bottom line, Blizzard’s actions could be studied as a master stoke on how to deal with geopolitical PR.