It's amazing that a company that Paul Graham co-founded is getting into bed with an authoritarian government notorious for its human rights abuses. To succeed in China you can't go against the government. So is he going to be pushing as hard for political change in China as he is in the US, or will he remain silent as his company reaps the profits?
Believing in his good morals, the underlying hope might be to achieve change through subversion: If YC becomes popular in in China, people might visit news.ycombinator.com and find very sane liberal thinking and many shocking truths about their country.
When YC is invested in China they won’t last on this website either.