No, it has nothing to do with it being foreign. There is no blanket acceptance of fantasy and mysticism in China. Undead and Ghosts are a very problematic. The reason mostly forgeign productions are targeted is simply that chinese companies know better what is acceptable and what is not while many foreign companies just assume that it works like in Europe or America.China has burned some RPG books, but it's not some blanket policy but instead mostly dependent on the whims of individual censors (which is it's own sort of problem). China is totally fine dealing with mysticism, fantasy, and violence, the bigger problem they have is foreign mysticism-fantasy-violence.
For D&D to succeed, or even to be allowed in China it has to change, especially when it comes to adventures. That either means that the chinese D&D won't actually be D&D or that WotC decides the chinese market is more important and all future D&D products will follow the rules China has on content.