The political concerns are real. It's too cynical to say that YC just cares about money, though. There would be better ways to create an incubator than to do it like this, if that were the case. One obvious question that hasn't been raised is: "Why not base it in Taiwan?" It's still "China" (for some definition of China), you can still get access to the talent that you want (you just have to try a little harder), and you could still get access to the market you're targeting.
It's not going to be easy, but it would better address the political and humanitarian issues raised.
It's not going to be easy, but it would better address the political and humanitarian issues raised.