Warshrimp said:
Hello, I'm an American and I have a few questions for any Chinese viewing this post; these are not sarcastic, I'm honestly curious:
Welcome to ask your questions Warshrimp. No 'sarcastic' meaning taken - I think if people ask each other more questions instead of making assumptions about each other, we build bridges.
I will answer as best as I can - though it is sometimes hard to speak accurately on behalf of 1.3 Billion people

I give the perspective of a middle class person living in Beijing. I also can't claim to be an expert on all things Chinese... so I may be wrong on some details, I'll try my best.
1. Are there independant news sources in China? For example, in America we have NPR (National Public Radio) which offers news, but we also have CNN, NBC, Fox, etc.
From your example, I guess 'independent news sources' means 'news source that is not owned by government'.
All local news agencies are state run - i.e. owned by the government. However, just because something appears on our news, doesn't mean we all automatically believe it 100%. Sometimes when I read international comments on Chinese media, I get the feeling that once it appears in our newspaper, we collectively bow our heads, sing praise to Mao, and accept the gospel. Frankly, we all know the state media is run by the government and of course will say things favourable to the government. I think whether a media is owned by a government or Mr. Murdoch or whatever, it will be favourable towards the owner. Just because it is printed, said or read, doesn't mean we all take it as the one sole truth.
In addition to local news, we have Hong Kong and Taiwan channels and media. These are available on payTV not like local news which is free to air.
Finally, we have international news such as CNN, BBC, International Herald Tribune, New York Times etc. These are also available only payTV.
On the radio, we have China Radio International (from memory I think it's 88.7FM) which broadcasts a variety of programs from around the world. I believe it has some programs from America's NPR and some from BBC.
I don't necessarily believe everything I read in HK/TW/Int. news over local news, or vice versa. And it is often surprising how similar stories are reported very differently - or some events are considered 'news' by one group and not another.
Oh, as a small aside... there is one official English language channel in China. It's called CCTV 9. After watching for 5 mins my brain begins to bleed out my ears. It's news reports are different to all the Mandarin news channels. I guess it is aimed at foreigners in China - and paints a ridiculous positive image. I don't know who really watches that channel. Local Chinese can't speak English so don't watch it. Almost all foreigners have access to BBC or CNN so won't watch it. That channel alone I think gives other Chinese media a very bad name.
And second aside... there is of course the internet. I watch Jon Stewart and Bill O'Reilly through the internet.
2. In China, if an independant news group is critical of the government, is that group punished?
A good question. And then it depends on the definition of 'independant news group' and what is 'critical'.
The local news generally does not speak negatively about 'the government' (though occasionally they'll be a big story on some corrupt government official or department). There are many negative stories though about pollution, rampant real estate, oppression of low class workers, failure to pay wages, rise of drugs and prostitution. Part of this is blamed on a lack of government control - so I guess this could be said to be negative story on the government. Since the government run agencies itselves report this, there is no 'punishement'.
Blogs and websites are very regularly critical of this and that government person or department for being corrupt, lazy or unsophisticated. I imagine some might be shut down - I don't know of any specific one but I'm guess there is.
Academics do often write articles on poor government - and since these are in academic journals they often do not reach public.
HK and Taiwan news is sometimes critical of mainland - I don't know so much of Taiwan but HK often speaks about not wanting mainland to infringe sovereignty. The English language paper 'south China morning post' has very regularly column writers speaking out against Mainland. This paper is available in mainland.
The international news like CNN and BBC used to be quite censored in the past with negative reports on China getting blocked - suddenly the signal would go down. In the past couple of years, I don't recall any blocking of CNN or BBC - even during the 'tough' times like the torch relay.
3. Is there any sort of local government in China? For example, here in America we have city councils which operate at the city level. Anyone elected onto a city council can influence the development of their city, hopefully for the better. Here in America, a city council would choose what areas are open for what sorts of development, local tax rates, and other things.
Sure, we have local government. Without local government, every small decision on where to build a public toilet or when to turn on the sprinklers would have to be planned by the central highest level? I don't think that would work.
The lower levels of government are normally elected directly from the citizens in the area and tend to the planting of trees, the management of pets etc. They report to district government which handles higher level things like local speed rules, rubbish collection, street cleaning. They in turn report to city government which handles tax, population immigration control, urban planning and so it keeps going up. We have the equivalent of your city councils.
Higher levels are appointed, not voted. One difference for example is that your mayors (the boss of the city) are voted I think. Ours are appointed by the Central Government.
Spacepony made a comment that I think I have to disagree - he said all laws are national not regional. One big problem in China is that we have TOO MANY regional rules, regulations that apply only to here and not to there. Furthermore, sometimes it's hard to know what the rule is - and that it only applies to north of this road or east of that river. It's been a long time complaint - all these 'secret rules' about the speed limit, or parking rules, or whether a permit to have a dog, or rules on how to start a business and what tax you pay, applies here or there. There are way too many differences between districts, cities and provinces.
(we in Beijing sometimes grumble that Shanghai exists in a parralel universe with different laws. Shanghai in turn would say that if Beijing would just adopt the Shanghai way of doing things then the country would prosper more. But I think this is a different discussion)
4. Do you have to carry any sort of identification at all times? Here in America we have our driver's license, but we aren't required to carry it, and not having one has no serious penalties (unless you're driving).
We have a national ID card. We need it to open a bank account, apply for gym membership, apply for passport, prove ID when going on plane. It's also required for anything that has government subsidy or legal effect e.g. children school or signing contract. If you're not 'applying' for something though, I don't think there's any need to carry it at all times. I've never in my entire life been 'checked' for my ID just on the street (except once when I tried to go to nightclub... but that was MANY MANY years ago).
I think your questions 5-7 are related so I'll answer them in next posting.