From my research so far it is clear that what medicines can be patented in the Chinese home market is quite different to what can be patented in western markets like the United States and Australia. They have a different legal tradition to western countries. They strike a different balance between the rights of the inventor and the incentive to innovate including in the medical area and the importance of not denying medicines to those that need them.
The situation is a lot more complex than just simply that China doesn't have patents - they do. WARF has had patents relating to stem cells in China.
It is my current understanding (which could easily be wrong) that an induced pluripotent stem cell (as opposed to human embryonic stem cell) derived medicine probably could be patented in China however it probably would have to be described differently in the patent so as to avoid the prohibition on patenting treatments for diseases.
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