Great read. This is expected sooner or later.
The Chinese writers issue...
It is not just the Chinese that are affected by this google practice. For years Google has been scanning and digitizing everything it can get its hands on - copyrighted and non-copryrighted works. I was even able to find a newly published edition of a textbook costing nearly $165 on google's scholar site for free, all pages. While it claims it will not allow you to view all pages - well, you just have to start a new session where you left off.
Google figures its been doing it to everyone everywhere so why not China.
All of this stinks for those that do have rights to material.
This is (in part) why Murdoch and company(ies) are trying to block Google from indexing their stories. That seems to be a more difficult issue to halt rather than Google stopping their Scholar project. The point is, copyrighted material is copyrighted material in any form.
As for China, Baidu reigns and will reign.