That's pretty standard fare for here. (China... I live here/there, whatever).
Couple things: very little Mao propaganda here (disregarding his face on the currency, you see more Mao portraits on T-shirts at a university campus in the west than you do here). TF2 isn't banned, it just isn't well known. The only AAA titles you see marketed here are games like COG (half the studio's based in Shanghai, what do you expect), so the product awareness of western games is really low. (Unless it's something by blizzard, in which case they have leagues for that shit).
Also, I'm not sure if this actually constitutes intellectual property theft because they haven't repackaged TF2 as their own product, they've just ripped it off. Doesn't make it okay... but *shrug*
I look at stuff like this with the attitude of "well at least they're playing something cool" (you should see the garbage developed as original IPs here... It's shameful.
Also, don't forget, the average income of an urbanite here is roughly $614 USD/month. That's not a lot of cash. It's not like most of the market here can afford to by any of these titles, so it's not like Valve would actually be losing money in the Chinese market, because there isn't a market here for games over $3.00.
Oh, and one last thing...
Most of the the people you talk to have never heard of Auschwitz or Bergen-Belsen. I've been told by some colleagues/students that there's no way the Nazi's could have killed 6 million Jews and Romani... They just don't know it happened, so copying Hitler isn't offensive here (he may in fact be more honoured than Mao.
Salamm
