An interesting problem of global business ethics. The New York Times seems to have broken the story yesterday, reporting the Chinese government has just announced that after July 1, all PCs sold in China will have to include "Green Dam" software that will allow the government to prevent users from accessing any sites the government deems "unclean," including everything from political dissidence to pornography.
I'm inclined to think that these companies should lobby the U.S. government to apply political pressure on China. Unfortunately, since China is our largest creditor right now, we don't have much political power there these days. Ultimately however, we need to find a way to credibly threaten stronger enforcement of Chinese patent and copyright violations, which are notoriously widespread.
So long as the Chinese government continues forcing American companies to facilitate censorship, this gives us that much more moral ground to stand on the intellectual property issue, which robs the U.S. economy of billions in annual GDP. This approach to corporate social responsibility whereby companies strive to progressively shape public policy on the global stage is persuasively defended by David Vogel in his excellent book, The Market for Virtue.