Reuters offers more insight into Chinese WAPI standard, to which only 11 Chinese companies have access: The Chinese government started requiring new Wi-Fi equipment to fully support the WAPI standard Dec. 1, with a grace period for existing devices and contracts until June, even though the standard is entirely confidential and only 11 Chinese companies are permitted to incorporate it.
This is definitely a protectionist move to make sure that Chinese firms have a role in the growing Wi-Fi market. And, of course, the standard almost certainly has a backdoor of some kind to allow government monitoring of Wi-Fi traffic; otherwise, why go to these lengths to essentially ban or disallow WPA?