According to Iwata, Nintendo's first priority is to meet the demand of existing markets, but he recognizes the potential in tapping the Chinese market. That makes a bit of sense, seeing how China has a population of OVER A BILLION.
We do wonder, however, if Nintendo will be able to compete with the already existing option for cheap, pirated Wii consoles in China. Unless Nintendo can introduce cheaper systems into the market, or get rid of the existing piracy, folks might be swayed to buy the mod-chipped consoles that play both U.S. and Japanese games. Even with piracy, though, we're sure that Nintendo will move plenty of systems in China and make even more money.