sure some of them are franchisees or JV, hitting them may cause some loss for local Chinese companies who have ties with them. It will be costly, but I believe China can manage it. It isn't like China can't live without KFC, Starbucks, Apple or GM. There are plenty substitutes. Chinese partners will be able to recover easily.
I do believe China need to start releasing the unreliable list with some penalties. Like I said, things have changed, the US is going at this aggressively because they think the cost of doing it is minimum, that is because China hasn't really targeting US companies in China. I used to believe that is the correct choice, but now with the US politicians believe they could target China at no cost, counter attack is needed.