Beijing's Forbidden City is one of the most recognized historical sites in China. The 200-acre site served as the imperial palace of the Ming and Qing dynasties, and today the Forbidden City features the largest collection of preserved ancient wooden structures in the world. The palace area, which has undergone renovations in recent years, attracts 7 million tourists annually and is open to limited commerce.

Despite the Forbidden City's openness to commerce, one prominent American company that conducts business in the palace area has come under fire for its local presence. Starbucks Corp., a poster child of green business admired by consumers and social activists alike, faces a brewing controversy over the Forbidden City coffee shop location. Chinese nationalists want the U.S. latte giant banished from the palace, and lawmakers are beginning to back the cause. "As long as [Starbucks] stays in the imperial palace it poses a challenge to our traditional culture," said Chinese lawmaker Jiang Hongbin. Other prominent citizens have echoed such cries for an ouster.

Despite Starbucks' politically correct business approach, the retailer's status as a symbol of Western cultural influence occasionally bumps up against powerful nationalistic sensibilities—especially in China, where it currently operates over 200 coffee shops. The issue is problematic for many U.S. multinational corporations, and many businesses respond with appeasement strategies. For example, Starbucks has already removed its trademark green sign from its Forbidden City storefront and may exit the location altogether. A similar case involves Google, whose ethics reputation became tarnished when the Internet firm agreed to carry on state-sponsored censorship at the behest of the Chinese communist government.

The Forbidden City debacle is just one of many global challenges for Starbucks, whose Beijing coffee shop outlets operate through a joint venture between Starbucks International and local Chinese partner Beijing Meida Coffee. For example, instant coffees like Maxwell House and Nescafe have dominated the Chinese coffee market—the "Nescafe" brand name is even becoming a genericized trademark in China.

However, in this tea-drinking nation, coffee culture is just starting to touch down. For now, Chinese citizens may be content with instant coffee. But as Chinese coffee preferences age and grow, Starbucks hopes the Chinese will demand a more sophisticated coffee shop experience--one like Starbucks markets successfully to masses back in the States.