...snip...
I don't think that opening accounts on exchanges outside China would be easy for a typical Chinese small businessman. Doing that sort of thing would require familiarity with the bitcoin technology and markets, not likely for such people.
...snip again...
I wonder, then, how arb is supposed to be working for the Chinese exchanges?
There should not be many traders doing arbitrage; it does not seem to be a game for amateurs. Arbitragers could be people with a commercial foot on each side of the border, e.g. import-export firms; or partnerships between Chinese and non-Chinese traders.
The scenario I was considering is when neither A nor B are regular bitcoin traders, just (say) a businessman who wants to bribe a government official in another town, and learns that there is a relatively safe way to do it using bitcoin.
Yes. I edited my question. Thanks.