Zang Yaqin of Microsoft told the Shanghi Daily of the companies move at the Entertainment Summit. He said they have no fixed timetable for the launch as it will hinge on several government bureaus.
Microsoft may use the fact that Xbox manufacture in China generates over $4 billion in export profits for China.
Nintendo also wants a slice of the massive Chinese market, their Wii console (illegal to sell in China) sold 2-3 million units in 2009.
China allow the iQue console to be distributed, this is based on Nintendo 64 hardware and was launched in 2003.