Even in the US, there are over 20,000 laws and regulations at the federal level alone. In China, there are even more. Any small foreign operator in China naive enough to assert with 100% confidence that they are not in violation of any of those codes is being dangerously foolish.
So here's the thing, I actually agree with you. What China will do, they will do out of retaliation. However, I can pretty much guarantee that whoever the patsy is, that person will be in violation of some obscure code that no one in their right mind would have been paying attention to. They will definitely be in violation of some law. And they will condemn him/her to whatever ungodly prison camp for however many years.
So China will also be simply arresting someone for violating their laws. That's the issue.
Now my point is that if you are American, and a small operator without the clout to prevent this sort of thing from happening to you, it's best to try to get out in front of the problem. I know that I really don't want to be one of the poor stooges sitting in a Chinese prison for a decade because these people are trying to make tit-for-tat points.
I'm not talking politics or philosophy. I'm just saying that China is not like the US, and I'm advising people to be careful if they are small and plan to operate in what appears to be a dangerous legal environment that will likely be getting more treacherous with time.