As someone who has lived in China for the past (almost) 6 years and still currently residing here, I can tell you that this news is apparently happening.
Whilst I do not orally support piracy and would not be at a loss if it completely vanished, I have to say, I do take advantage of it.
I have well-over 500 DVDs and I lost count of my PS3, WII and PC titles, each one priced at around 5-10 RMB. (10 RMB to the pound / 6.4 RMB to the dollar)
Five years ago, I couldnt walk down a road in Shanghai without seeing one of these special DVD shops, now they are rare to find! Oh, they are still there, you just need to know where to look.
China has been cutting down on pirated goods. I am here and I am witnessing it.
Skyrim will never be released in China and getting products delivered out (from overseas) can be a real bother. Next week I will probably see a pirated copy of Skyrim in my local DVD shop. I will buy it for $1.