I have read an article (PC MAG). The writer has a US region console and he is living in UK. After the NXE update, he decided to get a HDD from his local store and after fixing it to his Xbox360, he found it incompatible as there is a region lock.

I am not sure about China though. Is it NTSC/J ? If it is, then you won't have any problems using it .

I believe, if the guy is in his right mind, then he is possibly telling a truth and not a fib.

I am unable to recall the article link, but it's related to pc world.

However, something interesting that involves ebay , china and xbox 360 HDD.

http://forum.teamxbox.com/showthread.php?t=606482

Read the bottom post.