China can't play many online games for several reasons:
1. China's government doesn't allow it.
2. A good portion of cheaters come from China.
3. China also has a nice population of underground gold farmers and botters for profit.
There really is no way to hide your IP in a game aside from using a proxy. You/your friend probably made the mistake of using a insecure proxy that allowed your IP to be visible to the game admins, or used a proxy with an IP address from china. The only soultion I can think of is, use a proxy which is hosted outside of china. Another option is to move out of China, haha.
~ BaRR