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If you live in America and want to watch a video online, you go to YouTube. You live in China to watch a video, you go to Youku. Part of the reason why Youku is so popular in China is because the economy is booming, more people want to use the internet, and Youku has a Chinese interface.
But also the Chinese government isn't interested in people watching videos that criticize the government, so it wants its users on a China-based website, where the government can control the discourse.
Also an internet block on YouTube doesn't hurt matters :)