The Mini PolyStation 3 still stands defiant (Image Source: Geek.com)
The South China Morning Post reports that China has plans to rescind its ban on console games and hardware, allowing Nintendo, Sony and Microsoft to market and distribute their platforms (officially) within the country. Console gaming has been banned in China since 2000 out of fear that the violent and "unhealthy" nature of video games would give youth politically sensitive ideas (allowing PC gaming to do that instead).
Should the ban on console gaming actually be lifted (through the approval of no less than seven different ministries), console manufacturers would then have to agree on opening up shop within the recently proposed free-trade zone to be located in Shanghai where they will be required to produce hardware intended for mainland Chinese distribution.
To be sure, console hardware has long been exported from China for international consumption. The console giants first import components in the country, which then get sent over to contract manufacturers for assembly. And of course for consumers there's always been a "black market" for consoles within China, though it's not exactly very well hidden.
Shanghai's new free-trade zone is part of China's bid to turn the city into an international financial and distribution hub by offering foreign investors "world-class transport and communications facilities" and a tax-free environment where they can freely convert currencies with the Chinese yuan.
As you may have guessed, console titles would still have to be vetted by China's Ministry of Culture "and other relevant government bodies" to ensure they are safe to sell to the masses in the mainland.