Is it necessary to have a server in China?

Solution 1:

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.

Solution 2:

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.