The Chinese market has to deal with obnoxious barriers to starting a business and competition from government backed giants (tencent, alibaba). So long as the party shoots itself in the foot it will never replicate Silicon Valley.
Second time mainland China business founder here - foreigner. As everywhere there are barriers. However, I would say that in China it is not that hard to get going all told. While foreigners cannot really sole trade and there remain linguistic and cultural barriers, low initial capital requirements, a non-litigious environment, relatively relaxed licensing and a reasonably transparent and predictable visa system are big pluses versus the US. These days, the VC environment is also solid.
