The First Presidency and other senior leaders at Church headquarters in Salt Lake City have had discussions with a senior official of the People’s Republic of China from Beijing, and have established a relationship which we expect will lead to regularizing the activities of The Church of Jesus Christ of Latter-day Saints in China.
The Church's full news release provides more details. The announcement comes in the wake of a meeting of an unidentified senior Chinese official with the LDS First Presidency in Salt Lake City on August 24th, 2010, which followed up meetings with Chinese officials in Beijing in February and May, attended by Church apostle Elder Dallin H. Oaks and Elder Donald L. Hallstrom. All of these meetings were initiated by Chinese representatives.
LDS Church spokesman Michael Otterson explained the meaning of "regularizing". He said it primarily better defines how the Church and its members can proceed with daily activities, all in harmony with Chinese law. But he emphasized that the Church does NOT anticipate sending full-time missionaries to China, saying that the issue isn't even up for discussion. And for those who are wondering if the accession of an LDS member, Jon Huntsman Jr, to the position of U.S. Ambassador to China had anything to do with it, Otterson explained that the pending developments are actually the result of 30 years of building mutual trust with the Chinese, although Huntsman's conduct undoubtedly created a friendlier attitude towards the Church by Chinese authorities. Upon accepting the ambassadorial appointment, Huntsman had said he would not use his position to proselytize for the Church.
Mainstream media stories about the Church's announcement published by KSL Channel 5 and the Deseret News.
According to the LDSChurchGrowth blog, there are currently 14 English-speaking branches organized in two districts meeting in China, with many more groups in isolated areas. Elder M. Russell Ballard reported in 2008 that around 20 small branches had been established for native Chinese members, none of which appeared to have been operating just eight years earlier. Chinese law requires citizens and foreigners to be segregated for worship services. Foreigners tend to consist of North Americans, Europeans, and Koreans. Chinese Latter-day Saints living in China either joined the Church abroad or through family members in China as permitted by the government. Chinese members and congregations continue to meet privately (meaning that they're allowed to meet, but cannot publicize details about the meetings). Native Chinese LDS members are allowed to accept mission calls, but cannot serve in China. Even more detailed information about LDS history and operations in China can be found on this Cumorah.com article.
So one possible result of "regularization" may be to allow foreigners and native Chinese to worship together. Another possible result is that Latter-day Saints may eventually be allowed to worship publicly and even build chapels, although full-time missionaries are unlikely to be allowed anytime soon.