"but in China I believe that shorting is against the law.."

I believe so, but they need not do it from China. Do they not have offices or representatives on this continent. Laws apply to the particular jurisdiction.

Also, have not our financiers sold their easily gotten shares at below financed price (i.e. with tax write off )? So why would the Chinese be any exception?

Unfortunately, money talks loudest, so expect and be prepared for the worst.