China is a big aviation market where both Boeing and Airbus will have a share. It is also a major export nation that is keen to maintain good trade relations, part of it is through the balance of exports/imports. If I am not mistaken, aircraft deals are still made through a central authority (CAAC), except it appears now that individual airlines have a little more say on the type of aircraft they desire.
I believe that the 7E7 will have a role in the Chinese domestic and regional Asian markets, mainly replacing 767/A300/A310 on more mature markets and offering a capacity upgrade for current 757 routes that are growing. It is also the only mid-size product with a variant specifically aimed at short-medium range operations. That said, if Airbus makes good on its threat to dump the A330-200 prices, they could steal some of the orders, especially since the bullishness of the developing Southeast Asian markets seems to favour higher-capacity aircraft. I wonder if Boeing isn't being urged to push forward the development of the stretched version to attract the likes of TG
(Malaysia has been reported as seeking workshare on the aircraft), where there would be a need for a 7E7-stretch (along with 7E7 basic) even before 2008.