Not sure how true is this and when it will ever be launched. There are still so many unanswered questions like will Apple give in to the local Operators own terms and would Apple disable the wifi capabilities on its iPhone as required in the Chinese Market. China is a market that Apple would not want to miss but at the same time there are way too many local requirements that Apple would need to give in if they want to launch iPhone officially here.
As its, iPhone is everywhere in China regardless of whether its officially launched as most mobile users are aware of where to get it in the black market. The price has dropped from an all time high of RMB 8,000 ($1,096) to only under RMB 5,000 or less ($685) which will include the cracked code. Go to any of the mobile retail centers and you will see iPhone all over the place. Why bother having it launched as its already in the market afterall Apple could still have their iPhone in China minus having to negotiate its way with the Operators in China.
While the deal in China is not to be missed, Apple still has to consider the agreements that they had made with all the other operators. At the end of the day, perhaps a back door entry to the China market isnt a bad idea.