Qantas has been accused of giving into Chinese "bullying" by making changes to its website and marketing materials so Taiwan is no longer listed as a separate country.
The moves comes just a day after a staff member at a Sydney Chinese restaurant was sacked after she told her boss Taiwan and China were different nations.
Beijing is cracking down on companies that refer to the island of Taiwan, officially the Republic of China (ROC), as a different nation to the People's Republic of China (PRC). This is despite them having separate governments for 70 years, since the formation of the Communist regime on the mainland.
Under the One China Policy, China has claimed ownership over democratic Taiwan ever since and refuses to recognise its existence as an independent state.
Reuters reported that on Tuesday, Qantas confirmed it had amended its website to no longer refer to Taiwan as a country, rather than a Chinese territory, after China issued a warning to foreign airlines last week.
Qantas has done the same for Hong Kong which is often listed separately as it has a level of autonomy from Beijing. But there is no dispute that the former British colony is part of China, which is not the case when it comes to Taiwan.
The airline refused to comment to news.com.au but in an earlier statement said: "Due to an oversight, some Chinese territories were incorrectly listed as countries on parts of our website. We are correcting this error."
Qantas flies from Australia to Beijing, Hong Kong and Shanghai on the Chinese mainland but does not fly direct to Taiwan's capital of Taipei.
The airlines's move has led to some criticism on social media. One user said Qantas was "bowing to China's bullying and petulance". Another said China had as much right to Taiwan and Mexico did to the US state of Texas.
However, on Tuesday, news.com.au still found some references to 'Taiwan, Asia" on Qantas' website.
China's civil aviation authority told foreign airlines to check their websites and remove references to areas it deems as provinces as fully-fledged countries. Last week, US carrier Delta apologised after a drop down menu of countries on its website listed both Taiwan and Tibet, the latter a region in the Himalayas.
Not all airlines appear to have got the message. A quick look by news.com.au found Air Canada, Air France and KLM, all airlines that fly to Taipei, had the name Taiwan shown on route maps.
It's not just airlines who are in China's sights. Last week, the government shut down Marriott International's Chinese website for a week to punish the world's biggest hotel chain for listing Tibet, Taiwan, Hong Kong and Macau as separate countries in a customer questionnaire.
How companies deal with the vexed issue of China and Taiwan has been a political minefield for decades. In the 1990s, Qantas did serve Taiwan, but did so with aircraft shorn of the Australian flag or Qantas name so as not to ruffle feathers in Beijing.
On Monday, news.com.au revealed that the issue of Taiwan can get you in strife thousands of miles from China.
A Sydney restaurant was accused of sacking a Taiwanese worker for saying Taiwan was not part of China.
According to a Facebook post, a staff member, known only as Winnie, of the restaurant in the city's inner west was asked by her boss: "Does Taiwan belong to China?"
She immediately replied, "Definitely not." Twenty minutes later, she was told to go home and not come back to work the next day.
In her Facebook post, Winnie said she did "not even think about" the response. "Personally speaking, I hold a neutral position on the relationship between China and Taiwan," she wrote. "I was dumbfounded ... I felt speechless."
On it's website, the Department of Foreign Affairs and Trade states, "Australia has a substantial relationship with Taiwan including trade and investment, education, tourism and people-to-people ties."
However, it notes the sovereignty dispute and that Canberra has settled on Beijing's world view: "The Australian Government does not recognise the ROC as a sovereign state and does not regard the authorities in Taiwan as having the status of a national government."
Australia, for instance, does not have an embassy in Taipei but Canberra does maintains other links.