If this is the case, I would say that most of the exchanges will freeze their operations for a day or two until this mess doesn't get sorted out.
And voluntary refuse to earn a day or two worth trading fees (which likely be 2-3 times higher than usually)? Operating on the both blockchains looks as a much better decision.
This is what I was thinking too. Exchanges can be fork-neutral and they could offer services on both or more blockchains until they reach a limit when they cease to offer services on a particular blockchain.
1) This raises really big issues with future Hard Forks. For example - what happens if the China Miners/Exchanges decide to go a different route from Western Miner/Exchanges. Could the Bitcoin Supply split again? Because once things get more globally accepted and Bitcoin a more global currency - I can see potential future politically motivated Hard Fork divergencies. I mean - if Gavin & Mike can do it - surely China or the U.S. or Europe could do it?? As pointed out earlier - kind of blows the whole fixed supply concept.
No problem there! It will still be better than our traditional financial system of printing money! It will still be a fixed supply and it will be more transparent than what we have now.
Some clever bitcoin hackers may be able to create transactions that are valid on only one chosen branch. However, most transactions issued by typical users will be executed in both chains;. Thus they will not be able to "see" the two altcoins. When one of those transactions, by accident, turns out to be valid for only one chain, the client will either not notice ever, or will get confused, and maybe end up with his wallet in an inconsistent state, maybe even lose coins.
The Bitcoin CEO will save us all!
Well, right now the 5 largest miners (who have ~70% of all hashpower) could cooperate to starve all the other miners, and take 100% of the block rewards intead of just 70%. Or they could do much nastier things.
Don't forget that the system is built to incentivize playing honestly by the rules! They can do that, but the market will react for sure.