I listened to the Shackelford podcast on China a few weeks ago and it was interesting. They talk a lot about working around the government regulations by building courses, but not calling them golf courses (as Kerry mentioned). Growing the game in China seems like an extraordinarily difficult proposition. Creating a game that can only be played by the elite seems like a recipe for disaster in the long term due to the expense/country club environment, but it seems like there are few other options. The middle class in the major coastal cities might be able to afford some reasonably priced golf, but logistically how would that work? The population is so dense in many parts that it would be worse than golfing in New York City, which is possible, but tough.
Its also important to note just how poor the average Chinese person is. The per capita GDP in China is still only ~$7,000 USD, which means that the vast majority of the country isn't even close to being able to afford golf. Those who live in areas more suitable for affordable courses are the least likely to have enough money to play the game. However, all that being said, the game started in the clubs in the US and now can be played by all, so maybe the same will happen to China in 100 years.