Perhaps it's time for an update to this topic. Since all this was written, the new Chinese airline rules went into effect saying that you can't bring liquids in your carry-on luggage.
I asked before going back to the US in June, since I needed to carry insulin back with me for the 2 month break. I was told to get a Chinese hospital certification of my diabetes, and that the flight crew would have to hold my insulin. Thanks to my connections the certification was easy to get. To my shock I went to the teaching hospital on a random day and got a Chinese doctor (older) who understood perfectly in English what kind of papers I needed.
Anyway, I went to my domestic Changchun to Beijing flight with my papers in hand and insulin in carry-on. The security scanners didn't even ask to open my carry on. No one asked for the papers, the insuling stayed in the suitcase. Even the needles were no big deal, even in the days leading up to the Olympics.
On the way back to Changchun, between the Olympics and Para-Olympics, I carried in 18 bottles of insulin and many, many assorted bottles of medications in my carry-on. Again, no problem, no request for papers, no interest in seeing the liquid. I mailed my syringes for lack of space (though, for the record, my friends say insulin syringes are available here) and had no problem with that.
I also passed my physical last year and should get the results of this year's physical this afternoon.
So, if you're diabetic and need to bring in insulin, my experience says it isn't as difficult as it sounds.