Welcome to Islam DIR LittlePinky.
First of all, i admit that my information about *current* Islam and muslims in China is still poor, but i'll start with how Islam entered to China, then i'll tell you about current issues from what some of my muslim chinese friends in my university have told me.
Statistics are hard to find, and the number of Muslims in China today is somewhere between 20 and 100 million; it depends on whose figures you trust.
According to government figures, there are 20 million Muslims (1.4% of the population), 35,000 Islamic places of worship, and more than 45,000 imams in China.
This link might give you some information (4 pages) about how Islam started and spread in China:
BBC - Religion & Ethics - Islam in China (650-present): Origins
And this is a very interesting blog about the Muslims and Islam in China:
Islam in China
I have some muslim friends in my university. Some of them finished their studies and went back home. I had a long conversation with one of them once about the situation of muslims in China.
He told me ...
"brother, when i was in china and before coming to Malaysia "
where me and him study", i knew nothing about all this--
he mean the teaching of Islam and the diversity in Islam and Muslims societies--and all what i believed in, was just what they have taught me in chinese schools, and there where i picked the evolution theory "for instance", etc--
in opposed the creationism theory held by muslims--and all what i heard was just rumors here and there about how the muslims live outside China, i was just a muslim by name and heritage".
Many of the muslims in china, were almost isolated from what was happening in the world outside of China. I think the internet had a great impact on enhancing and enriching the communication between muslims inside and outside of China.
If you went through the link provided by the BBC, you will notice how the chinese government try to restrict the muslims there. I won't even be shocked if many of them didn't know that their roots are islamic one, because of the strong influence of the government there.
Another friend of mine got married with a malaysian muslim girl here and worked here a bit then went back to China. He told me how much he hates the place where he lived *as a muslim* but he managed to move to another more acceptable city for him as a muslim, where it's clean there, can find halal food, and have a healtheir and more free enviornment.