You are correct. Rural and outdated are good words to describe China's overall internet presence. I live in Chongqing, a city of more than 30 million and run almost entirely by the central government. That, I think makes it very unique as government intervention plays a very large role in how we do our job. Other than Beijing and Shanghai, who see a large presence of international business, Chongqing is 99% Han. Therefore everything here is very culturally pristine.
I'm from Chicago, so I definitely understand what you are saying, and I apologize for not explaining that further.
So far I've learned that older versions of PHP dominate here. Agencies are also very fond of HTML 4 (as HTML 5 is not widely supported). As for tools, Dreamweaver and Photoshop seem to be the clear winners. I haven't seen any popular Chinese environments however. Due to limitations of the Chinese Hanzi (characters), it is simply easier to go with western platforms.
I am meeting with the largest web design firm in Chongqing very soon. So I hope to make a few business ties and mutually gain from the experience.
Awesome \m/