From the CBC:
The Walt Disney Co. plans to adapt, rather than translate, the film for the Chinese market, working with Shanghai Media Group and Huayi Brothers Media Corp., according to a statement from Disney released Sunday.
By working with Chinese partners, Disney can bypass China's annual quota of only 20 films by foreign studios and ensure wide release in the Chinese market... Like the original, the Chinese version will centre on a basketball player lured into singing in a high school production. Disney manager Jason Reed told Variety that Disney had initially contemplated making martial arts the main sport in the film, until its Chinese partners pointed out that basketball is vastly more popular.
...High School Musical has been a big hit internationally, airing in more than 30 languages in some 100 countries. It has spawned two sequels, and a fourth instalment, starring none of the original cast, is on the way.
See also this past CDT post on plans for Shanghai's new Disney theme park.