Everyone probably knows that all publishing houses in China are technically state-owned. In a general sense this is a true statement, but there are several important caveats. Books in China are published via the mechanism of a "publishing number" (刊号), similar in concept to an ISBN, which effectively limit the number of books that can be published and who can publish them. Only state-owned publishing houses are issued with publishing numbers, which has resulted in a lively grey-market trade in the numbers. Though the state-owned houses have got all the numbers, who actually ends up doing the publishing is another question.
In recent years, most state-owned publishing houses have lost their "iron rice bowl" (state subsidies) and are now responsible for their own solvency. When this reform came, many were not up to the challenge, and either collapsed, found other sources of income, or simply wallowed in stasis. The wrecks of many of these publishing houses are still around, perfect specimens of post-Communist malaise: uninterested in their business, terrified of risk, choked by bureaucracy, and concerned mainly with avoiding work of any sort.
Other publishing houses adapted, and learned to do business. Though writers sometimes complain now that publishers are more capitalist than the capitalists, concerned with nothing but making money, they are at least functioning businesses now.
Another phenomenon has been the rise of "culture companies" (文化公司) and other privately-owned businesses that produce books. They buy license numbers from the publishing houses, but take care of everything else themselves — they are de facto publishing houses, though this practice is not technically legal.
When partnering with Chinese publishing houses, it can at first be difficult to know what kind of partner you've picked, and the experience will vary wildly depending on how attuned they are to the western mode of doing business. Thorough research into potential partners is a necessity, and it can be a good idea to allow partnerships to develop through baby steps.