Screenshot of Tudou video sharing site. Tudou was found liable in one lawsuit against it and ordered to pay RMB 50,000 (U.S. $7100) in May, 2008 (see this article). Apparently (after the lawsuit?)Tudou started partnering with some content companies to offer content legally in return for sharing advertising revenue.
I don't think there's any doubt that P2P is a viable method of distribution for TV shows and other content and, when done illegally as described, certainly quite profitable to the companies facilitating the illegal conduct. If this can be done in a legal manner with content owners (and authors) getting a share of the profits, that'd be a much more equitable arrangement. However, if they can get away with illegal distribution and profit to a greater extent by doing so (by avoiding payment to content owners), there doesn't seem to be much incentive for legal P2P distribution. The article doesn't mention whether any Chinese P2P companies have tried to negotiate deals with content owners, but I why would they if they can make much more money operating illegally without serious adverse consequences even if they are sued? Even though damage awards tend to be very low for copyright infringement in China, it seems the only way to force business to start operating legally is to sue them (just as it has been in the U.S. and elsewhere).