Remember that China has the 'Great Firewall of China' and censors most forms of media. They banned it probably because China might be viewed in a negative way in the game.
Dead Space was not banned, or even censored. Left 4 Dead is not banned, but the sequel is. I'll agree that it is a poor decision, mainly because of our R rating for movies, but not for Video Games, and there is worst stuff on TV. But it's not our say.
Besides, Video Game censorship here in Australia is not as bad as it is made out to be. It is probably 2 out of 10 games that get rated by the OFLC that are banned. Mostly due to excessive violence and sexual themes, but those 2/10 games are games that are pretty bad anyways.
Not out-right banned, just censored to get rid of the swastikas. Understandable, that they want to try and move on from the past. Also, because many of those games portray Germans in a negative way. You wouldn't really want to release a game that insults an entire nation.
Sorry, I just wanted to expand on or correct some of the statements you made.
On topic: I can kind of agree with them. If you think about the target demographic, it makes sense. The battling and breeding are not worse at all. The 'violence' in Pokemon is essentially the same as Loony Toons violence. Breeding, I doubt young children would grasp the entire concept of breeding anyways.
No, China was actually in a positive light in the game.
Yeah, but some horror games go get banned (just not the ones I mentioned).
Incorrect, games with nazis sometimes gets banned (such as Wolfenstein 3D).
Such as a whole bunch of banned movies, books, TV shows, etc. You get it, don't go around correcting people once you see them write something, it makes you look like an *** (sorry, I'm just being honest).