From what I understand. Sony got the official ok to release a region free PS4's. That is the only reason they were going to release the console in China. After stores started recieving the console a Chinese netizen filed a complaint to the Beijing Bureau of Culture Affairs. Time went by until the goverment got to the complaint, after reviewing the complaint the goverment had a change of heart and decided that Lio Ruizhe point was valind and the PS4 should have the same restrictions and/or region locking the Xbox One provides. Unlike the Xbox One, the PS4 had no region locking/drm system/strategy waiting in the wings. It seems like neither side has budged since this friction arose, and since Sony doesn't have an abundance of supply, this isn't as high of a priority for Sony.
After the losses and trouble Sony had regarding the PS2 in China, I think we have a text book example of a stalemate.
For more information you can visit Lio Ruizhe wikipedia page:
https://zh.wikipedia.org/wiki/%E5%88%98%E7%9D%BF%E5%93%B2