Is it necessary to host your website in China, to be optimum for the Chinese market (and search engines like Baidu?) – No, but…
A website hosted by a Chinese provider has the benefit of having Web pages that load more quickly in Chinese browsers and are simpler to index by regional search engines.
Hosting within China is extremely difficult for businesses that are based outside of mainland China, including in Hong Kong.
In order to host a website in mainland China you must apply for and be given an ICP license, which is a license issued by the Ministry of Industry and Information Technology.
eCommerce websites without an ICP license also run the potential risk of being “shut down” by the Government.
Hosting the site in Hong Kong is advised if the organization that owns it is based outside of mainland China, and does not have any branches or subsidiaries there.
Among the most used hosting providers in China are Aliyun and Xinnet.
Alternatively, if you are looking for a hosting provider in Hong Kong, SinoHosting are one of the more popular choices for foreign companies.
Through modern CDNs, it is not imperative to host a website in China or Hong Kong for speed benefits.
Baidu et al are able to rank websites hosted outside of China/Hong Kong, and those hosted on global CDNs (including those with and without Chinese/HK data centers0.