That's right, and that beggars the question, how would Proview [again, just the same guy in charge of everything] block any iPad sales in China, when it promised that it would sell it.
Given that Hong Kong was only handed back to China just over 10 years ago, luckily, it's not fully integrated with the mainland yet. The mainland is where the action is in any case.
Interestingly, a mainland Chinese court has sided with Apple, but again, even though a mainland Chinese court rules, it doesn't mean it can apply to the whole of China:
"On 24 May 2010, [Apple and IP Applications] instituted proceedings against Proview Shenzhen in the Shenzhen Intermediate Peoples Court and filed an application for APO (asset preservation order) in respect of the China Trademarks. The application was granted on 12 June 2010 but subject to the APOs obtained by some other Mainland banks"
What is left is likely to sue the parent company for acting in bad faith by them claiming to be selling rights they didn't actually hold. Which comes off like they were fine with some little company having the rights and wouldn't have said anything had it not turned out that the UK company was working on Apple's behalf (meaning that Proview feels they undersold the 'mark and would have demanded more money if they had known it was Apple etc)
Bingo. Which beggars the question again, how would this lead to Chinese authorities confiscating iPads? That's the disconnect.
I think Apple should ignore the Chinese government, to be honest. Can't sell in China? Too bad, just continue manufacturing until like you say, they can move out [which the Chinese will never let].