Why would you need to visit China to have an opinion that could be arrived at by looking at financials - a common practice in measuring success. Just look at a portfolio of large Chinese companies - they are doing well, thus I would also hypothesize that they are well-run companies.
Chinese firms are riding a huge wave of growth driven by wage differentials. In this macro context, it's easy to make a lot of money with poor management.
I doubt you need to defend it right away... if you get more powerful - yes, why should anyone want to attack your micronation? They rather do it in diplomatical way so other countries don't recognize your sovereignty.
An American billionaire or (billionaires) sitting on a completely undefended island somewhere...
Don't you think that would be a magnet to just about every terrorist organization in the world? Not to mention if it is anywhere near East Africa I would image a few boat loads of real pirates turning up pretty quickly - even in a lot of what would look like safer neighborhoods I would expect you would start getting a lot of attention from organized crime and other very scary people.
There are no undiscovered or unclaimed islands to start a new country. Existing countries are protecting their sovereignty and territorial integrity... in theory you can "build" a new country... an island, 22 km/14 miles from the border (territorial waters). Probably it's expensive.
There are many micronations: http://en.wikipedia.org/wiki/List_of_micronations Why gazzilionaires haven't started one - I don't know, probably their life is good enough to enjoy it in countries that already exist.
If anyone wants to start a new country and has budget - let me know. In the beginning we can make money by selling domain names, if ICAAN approves us. So we need to pick a good name for our country to get a decent domain name and make shitloads of money.
We can also become a nation of internet freedom... we can get loads of investments from people who want to move server parks to our territory to be protected from other governments and evil censors.
Could in theory lay down your own fibre to several major countries and have a underwater datacenter somewhere, taking advantage of cool water for cooling? Lots of cool engineering could be done to keep it going. Power would be a issue but it could be solved. Would be kind of cool. And since it's offshore nothing can be done right? They could cut of the internet connections, but that would have to be solved by multiple secret lines to different countries/areas and possibly via satellites? I'm just theorycrafting here :D
