Our servers are in London, UK on rackspace cloud. We have most resources on the rackspace CDN which improves speeds to most countries around the world. We are now selling our product in China.
I will have up to 500,000 Chinese school children using our website.
Do I need a dedicated server in China?
Do I need any special configuration to serve a website to China from the UK?
I live in China and yes the Great Firewall is a serious bottleneck for foreign websites.
In order to have a server in China , you will need a special authorisation which can only be obtained if you have a company based there. You will then be allocated a number which will be required by any Chinese hosting providers.
Here's a link for the application requirements
http://www.sinohosting.net/icp.php
Hong Kong & Macau are not yet considered mainland China so I'm not sure if there are any advantages being hosted there. Rackspace actually have servers in Hong Kong, but as mentioned above, the real issue is not the distance.
Having a dedicated server in China will definitely improve your speeds there as opposed to having the server in London.
The problem you run into is any type of staffing or cost it would take to maintain the server and also to make sure everything is up to date between both servers. Having a local crew would be ideal as you don't want someone shutting down the server at 3AM with no one able to turn it back on unless they take a nice red-eye over.
Using a CDN with nodes in or near china is more important than having servers (serving the HTML page) in china - http://developer.yahoo.com/blogs/ydn/posts/2007/04/high_performanc_1/.
Unless you're just serving text, your web pages will have many components and only one of them is the HTML page. Usually most of the time loading the page is spent on loading the resources (images, js, css), so make them physically near the user and the site will load faster.
We have users all over the world, our servers are in the US and content on a CDN (amazon s3).
Perhaps the suggestion of having a server in china is based on the potential problems with the great firewall of china?