Personally I believe that a domain extension is not critical when it comes to SEO and SERPs. Unless we are talking at a country level, where local ccTLDs have proved to perform better. For instance, for most searches conducted in the UK (on Google UK), .co.uk seems to perform better, or at least far more better than on searches conducted from other parts of the world. Same thing applies to Australia, Spain, Canada etc.
It is assumed that China extensions (.com.cn, .cn etc.) can’t perform that well on Google outside of China. When taking part in the UK webmaster world SEO contest (for the keyword seocontest2008 ), one of my motivations was to see how a new site with a Chinese extension would match up in such a competitive arena. So far I have been rather impressed. Without any serious link building strategies (some participants have reportedly acquired thousands or even tens of thousands of links already!), today the site is ranked #22 on Google when searching for seocontest2008. The organic SEO done on the site itself surely help, having the site hosted on a US server doesn’t harm neither, but the main conclusion for me is that a dot cn site can match up with any site worldwide when optimized properly.
I would have probably performed better by creating a blog on a sub-directory on seo4china.com server, which would have taken away the age factor and put the blog on a relatively trusted domain. However, I am confident that with seocontest2008.com.cn I should be able to get within the top 10 at the end of the contest. Wish me luck (and give me links 
) !