Great post Ryan! I completely agree with you on the point that foreigners have a disadvantage in China due to the cultural and regulatory barriers and partnering with a local company is almost always useful. My family business has plants in China which we initially thought we could set up as fully owned entities. We quickly realized this was not possible for the reasons you mentioned and thus chose to go in with a JV partner that has close ties with the local government.
However I do not completely agree with you on being transparent with the government to gain their trust. While Microsoft was able to sell into government organizations by being transparent with their source code, I feel like they basically gave in to the policies on the CCP. The government now has full control over what content Microsoft displays on their website. Also for smaller and medium size businesses, being transparent poses a great risk of IP theft. Imagine a foreign company trying to create a new product in the tech/ financial services sector that decides to show what their secret sauce (source code) is to the government.. There is a high probability that someone will replicate this even before you know it. While China is a large and growing market, there should be balance between transparency and IP protection.