JenMazz, in India, we don't think that this is an ethical practice.
The use of the words "standard practice" does not justify your
explicit business interests and I don't think that even the Chinese
authorities are claiming that the entire Arunachal Pradesh area
belongs to them. It is a matter of fact that there are border issues
between India and China across the borders including Arunachal region.
But both the governments are holding discussions to resolve these
issues.
But Google's interest is just in business, I think. If Google Maps is
just a "toy" and the information with them is for "cheering people",
they must mark it accordingly, at least not to mislead thinking
population of both the countries.
Please note that Google already admitted that they made a mistake
about this border conflict and this news is published by Times of
India on August 8, 2009 at
http://timesofindia.indiatimes.com/india/Google-admits-mistake-of-wrong-depiction-of-Arunachal/articleshow/4871753.cms
There are so many separatists groups are functioning in India as well
as in other countries. If an influential Tamil activist group claims
that Tamil Nadu is not an Indian state but a separate country, will
Google Map mark it as a "separate country" or a 'disputed region' ??
You must be more sensible while dealing with sensitive matters like
this. Either you declare that Google Maps and Google Earth are DO NOT
PROVIDE CREDIBLE INFORMATION and warn people from considering it as a
matter of fact or otherwise FOLLOW RECOGNIZED, INTERNATIONAL BORDERS.
Don't play with words like "standard practice", depicting that you are
having plain business interest only in all parts of the world.