Actually that was going to be Shanda Games. It sounds like you are the one who is misinformed.
http://ffxiv.zam.com/story.html?story=23284
Per the Shanda Press Release:
"Our in-house game development team is well-qualified to assist in the localization of FINAL FANTASY XIV to the China market, while our strong sales and marketing capabilities and extensive game operation platform can provide access to the broad audience of Chinese gamers. Since its debut in 1987, the FINAL FANTASY franchise has attracted many devoted fans worldwide and, based on our experience and expertise in the China market, we are confident in the success of FINAL FANTASY XIV as well as other future collaborations with Square Enix. We believe our strategic partnership with Square Enix represents an alliance between leading game companies in Japan and China, and we look forward to broadening our business through this partnership."
Develop the game in China for low cost. Outsource localization and administration to a company that is familiar with doing that type of business within the country. Makes total sense.
Reading through their investor relations docs, they identify "weakness in the development team and project management" as the root cause for this games failure. When you are first working with offshored staff, this is an inevitability.
It would also explain why its taken such great lengths of time to make minor changes to the game code, as perhaps onshore staff has been having to learn the code.