China is a bit of an interesting country. There's been talk of them using companies to spy on other countries like the US, as well as the fact that they censor the internet within mainland China. Leaving many websites like Twitter, Facebook, Instagram and all of Google's websites blocked. Now a user over on Weibo has stated that Pokemon GO is here so that "the U.S. and Japan can explore China's secret bases!" Whether that's true or not, is up for argument. However, a U.S. senator has asked Niantic and Nintendo to clarify the data privacy of Pokemon GO.
The game is not yet available in China, but that hasn't stopped people from using the game. The game uses mapping from Google Maps to take you to PokeStops where you can collect items, as well as catch all of the Pokemon that are in the game. Google Maps doesn't have the best view of China, considering Google has been banned from the country for about 6 years now, that would make plenty of sense. So conspiracy theorists believe that this is how Japan and the US, through Nintendo and Niantic (which Google is a major shareholder of) can locate where China's military bases are, because users wouldn't be able to go there and collect Pokemon. What the Chinese are thinking is that, Nintendo could place rare Pokemon there, and if players aren't attempting to capture them there, then it's likely restricted access and a military zone.
It's a bit far-fetched, but it could be a scenario, especially if a war ever does break out. Chinese Foreign Ministry spokesperson Lu Kang stated that he did not know about the reports stating that Pokemon GO could be a security risk. He also mentioned that he hasn't played the game. Other government officials in China haven't spoken about the game nor the security issues about it.
Niantic has said that while Google Maps is banned in China, it would make it difficult to play Pokemon GO in the country. But that they are working with the government to make the game available in China. Which is important, because China is the largest country in the world, and one of the biggest gaming markets as well.