I think the sentence on the Captain was a bit harsh. Banned for life from flying an aircraft in Chinese airspace. That means that he/she can not even fly for a non Chinese carrier operating in Chinese airspace, even say on its way to Europe. And may limit his/her career.
I think ATC (being the govt) is very upset about pilots dis-obeying direct orders six times in seven mins (if I read correctly). And they wanted to make an example of the pilot so others will think twice in the future. How much leeway do pilots normally have regarding whether to accept or deny demands from aTC?
No doubt it is very important to get out of the way of an aircraft that has declared MAYDAY in any country and not doing so is very unprofessional.
Still life time ban? How about five years? Ten?
I wonder what the USA would do in this situ or a western European nation?