Axiom: There is plenty of work for you in Shanghai, trust me!
If you have IT experience, you wont find trouble finding work in Shanghai, Beijing or Dalian atleast. There are plenty of job opportunities for native Swedish, German, Dutch, Italian, French and Spanish speaker too , doing LET and SQA for big companies like Nokia, Microsoft, Adobe, Apple, HP etc. Most of them have outsourced their LET and SQA to China and their offices here always needs native speakers for many languages (but primarily: Swedish, German, Dutch, Italian, French and Spanish).
However, you are most likely NOT going to score any of these jobs if you are not already in China.
Doing business here .. well, yeah.. it depends a lot how you are going to etc. Me and another swedish colleague here in China are setting up a local business this year. The most common problem with establishing a legal business on mainland as a foreigner is that you must proove that you have money enough to run this kind of business (and this varies from province to province and city to city) but it is rarely below 200.000rmb. Here in Beijing it is more likely 300.000rmb. You dont have to pay this money, you just have to put it in your business bank account. After you are registered and licensed you can use the money. The ACTUAL fee for starting a legal business on mainland is around 12.000rmb. If you are native Chinese you can do this and often without having to show u have 2-300K in the bank. Or .. you can get fortunate like me and my colleague who got acquainted to an English diplomat living here who knows the right people to circumvent the 2-300K deposit. Doing business here on mainland, having the right contacts is very important.
Then there are many pros running your business offshore from HK as virtual office , or physical. However it is no longer possible to establish a HK LTD then conduct all your business in China mainland taxfree as it used to be. You can do this up to 180days legally now, beyond that it is no longer taxfree and you will be double taxed instead. Both in mainland and in HK. There are always ways to work around this legally but then it becomes more complicated and you need to have the right connections.