The stories you told are true but just tell one side of things.
On the other side, nowadays big companies such as Sina, Tencent, 163(Netease formally) you mentioned and Alibaba, Baidu, among others all grew up from small startups without government connections at the beginning.
And more and more new startups are founded everyday, some of which will be very successful, just as in USA. Qunar and 58.com are the newest ones with market value of more than 3 bilion dollars.
As for content-based business, there are still room for startups. We have seen several new technology news websites emerging these days. Even user-generated content business is possible if you avoid risky political discussion.