Not only by law that they have to have segregated servers from us and the rest of the world, time limits and whatnot, (But the blatant racism still going on between the Japanese and the Chinese... I've played a few games released in Chinese territories, and it seems that they have a very strong dislike for the Japanese, especially when the time comes for group play, they'd either PK the player over and over, or kick them if they even spoke a lick of Japanese.)
Now it's not the case with all Chinese players but it's a rather huge majority of them, why they do it, idk, but they tolerate other foreign players.