I am involved with the Bitcoin industry in China, and I believe the regulatory uncertainty is the main reason why Bitcoin hasn't taken off in China yet.  Bitcoin is relegated to early adopters and enthusiasts now who just trade it, hold it, or mine it.  But the specter of regulatory crackdown will keep Bitcoin from going mainstream.  Entrepreneurs in China will always push the envelope though; they always have with new technologies in China, if you look at the internet and wireless industries as examples.  China won't crack down unless and until something gets big enough to be a threat, but it is definitely on their radar, as there was an internal report written and circulated around MOFCOM regarding Bitcoin in 2011.  I would hazard to guess that China regulators are also waiting, as a lot of the world is, to see how the US decides to regulate cryptocurrencies.

I would be enthusiastic about helping to grow the Bitcoin community in China, Taiwan, and around Asia.  PM me if you want to connect.