I think the rapid development of ASICs is a large part of the issue. The capital lifecycle of Bitcoin mining is currently on the order of months to perhaps a couple years. That, combined with the volatility of Bitcoin price, makes the Chinese approach ideal.

As the ASIC market matures, and perhaps as the price becomes more stable, I think we'll see mining begin to occur in more areas as planning for 2+ years begins to make sense. Iceland would be one attractive area, as would some desert areas with low costs and solar energy.

Certainly difficult to predict, though.

The Tibetan plateau is huge - 25x bigger than Iceland, and at an average elevation of 14000 feet. The amount of water that comes out of the plateau and needs to make it to sea level is mind boggling. There is a lot of cheap energy to be had there.

China is kind of corrupt and under regulated. I imagine the capital to build the miners comes from some banks or nationalized corporations that are not going to get it all back while the bitcoins disappear into the organisers pockets.

Extremely cheap hydro power at around 0.01-0.02 USD/KWh. China has more hydro power than customers in a lot of areas.

Labor and regulatory costs are a huge factor as well.

Subsidized electricity? Just one data point, but my electricity bill last month in Shanghai was ~$15.

Closeness to the chip manufacturers?