I'm not convinced by the idea that a 4 series won't sell in China simply because of the four.
I have lived in Taiwan for ten years. A4s sell well here, rav4, 747 and so on.
Personally I think it's a wise move to differentiate premium products by name. However the m3 issue is a tricky one as you can't sell a 4 series 335 without the cache of it being a cousin of the mighty m3.