It has been a bad few weeks for anyone wanting to express approval for Hong Kong protesters online. A player of the Hearthstone online game, for example, ended a stream with a statement of support for those engaged in the protests against local police and government. While doing so, he wore a mask similar to the ones worn by many protesters. Blizzard, the owner of the game, was not amused: the player was immediately removed and banned from participation in Hearthstone esports for 12 months.

In another case, Daryl Morey, general manager of the Houston Rockets basketball team, tweeted – and quickly deleted – a message in support of Hong Kong’s protesters. It seems that the National Basketball Association was alarmed by the furore this caused in China, where there is a huge following for US basketball. Eventually, the tweet was restored after some US politicians became exercised about the curbing of free speech in their jurisdiction. But the point was made: don’t annoy the Chinese.

And then on Wednesday, Apple removed HKmap.live from its App Store just days after approving it because the authorities in Hong Kong claimed protesters were using it to attack the police. Around the same time, the company also removed the app of the news organisation Quartz following complaints from the Chinese government.

The email sent to staff by Apple’s CEO, Tim Cook, explaining the deletion of the app was quickly leaked. Two of the assertions in it, including the claim that it was being “used maliciously to target individual officers for violence”, were subjected to a devastating critique by Maciej Ceglowski, who has done some graphic on-the-spot reporting of the demonstrations. The inescapable conclusion is that Apple executives were prepared to act on the basis of unwarranted and inaccurate assertions by the Hong Kong authorities.

Recent developments show how fear of losing out can intimidate people and corporations

There’s lots more where that came from. What’s happening is that the delusions of decades of wishful western thinking about China are finally being exposed by the crisis in Hong Kong. These delusions took various forms over the years. First, there was the theory that since economic development required capitalism, then that would bring democracy. The Chinese said they would have one without the other, thank you very much. And they did.

Then there was the fantasy that adopting the internet would bring openness and therefore democracy. Same story. The most recent delusion is that China’s current turn towards totalitarianism is doomed because such societies stagnate and decay. Xi Jinping and his colleagues beg to differ: they believe that information technology can enable them to have total control without sclerosis. Given their track record, it’d be unwise to bet against them.

Western delusions, however, only partly explain why the Chinese regime has been given such a free pass for so long. The most persuasive factor has been the tunnel vision of western corporations. When they look at China, they see either a colossal (and exponentially expanding) potential market or an emerging tech superpower (and therefore a formidable competitor), or both.

On the marketing side, those who are obsessed with getting a foothold in the Chinese market seem indifferent to the necessary ethical compromises. As the New York Times columnist Farhad Manjoo puts it: “If the first and most important cost of doing business in China is the surgical extraction of a CEO’s spine, many businesses are only too happy to provide the stretcher and the scalpel.”

Then there is the prevailing tech industry obsession with China’s putative advantage over the west in artificial intelligence, which, at the moment, is mostly just big data, plus machine learning. The conventional wisdom in that field is that the more data one can acquire for training machines, the better. Since the Chinese state asserts its right to all data gathered by digital companies, this is seen as giving its firms a colossal advantage over western firms, which are hampered by our tiresome obsessions with privacy, human rights and the rule of law.

This perception is what makes tech companies apparently unable to see China as what its behaviour reveals it to be: a growing and existential threat to freedom. That’s why the developments of the last few weeks have been so revealing. They show how perceptions of commercial power and fear of losing out can intimidate people and corporations.

What’s happened is that the old world of the cold war has morphed into a new bipolar world in which the alternative to liberal democracy is not the Russian federation but China. Russia is annoying and dangerous (and it has nukes), but it’s not an alternative system. China is – and one that may prove increasingly attractive to many non-aligned countries because of its amazing accomplishment of lifting so many people out of poverty so quickly.

The west – and its giant tech corporations – urgently needs to come up with a smarter way of dealing with China than the current approach of kowtowing to it on account of its market potential. It’s time they remembered that kowtow is derived from a Chinese word that means “the act of deep respect shown by prostration, that is, kneeling and bowing so low as to have one’s head touching the ground”. In other words, a servile cringe.

• John Naughton writes the Networker column for the Observer New Review