The specific laws vary of course, but a person cannot receive work related income from a foreign entity without reporting it correctly, both in the country in which the company is located and the country in which the employee is located. Even within the EU for example, with its freedom of movement for people, goods, and capital, cross border income must be correctly accounted for by both parties.
This is just a sovereign government doing what all sovereign nations do. If nations didn’t do this the consequences for even just tax collection would be immense, not to mention the many other negatives.
There’s no need to throw China bashing into every subject under the stars just because that’s apparently what counts for journalism these days.