Will they be released only in Taiwan and Hong Kong or the entire China?
Well, I think it applies on all of them. Remember that China also have iQue 3DS XL, so they can still get one :)
I always thought Pokemon was called 口袋妖怪 (kou dai yao guai) in Chinese - literally meaning Pocket Monsters. The new name is a little weird to me.
But it's great to see the games finally getting localised in Chinese. I've always wondered the names of some Pokemon in other languages.
Speaking of names, I think 口袋妖怪 has been used as unofficial translations of Pokémon games up until now. Btw, the new name refers to two names that was adopted to Pokémon anime series that time, 宠物小精灵 (in Cantonese) and 神奇宝贝 (in Taiwan), while 宝可梦 is like the Chinese way of saying Pokémon for me. Besides, I think the official name 精灵宝可梦 is not quite new, since it has been used in Mainland China since about 6 years ago, and it seems like Tsunekazu Ishihara (the president of The Pokémon Company) wanted everyone in Hongkong and Taiwan to call Pokémon with this name from now on.
I feel like this is Game Freak's attempt to expand the franchise onto the Chinese market and increase sales for Sun and Moon to surpass R/B's sales due to having the largest population in the world. However, we should be reminded that the Force Awakens flopped at the Chinese box office, thus failing to surpass James Cameron's Titanic and Avatar as the highest grossing film of all time, so I fear the same would apply with Pokémon Sun and Moon if GF tries to surpass R/B sales by trying to sell it to the Chinese.
On the contrary, I think it might be the opposite because I think Pokémon is already known in China, even though in the form of anime and manga, and I'm sure they wanted the games to be released in Chinese language officially (to the point that they make petitions several years ago) because usually they have to resort to using unofficial language hacks and all back then. On top of that, in some Chinese forums, the reactions on this is mostly positive.
And now, for my own thoughts about Pokémon in Chinese...
Personally, I'm thrilled when knowing that it'll also come with Chinese language because I've been wanted to play Pokémon in Chinese language at some point, and I hope it might improve my Chinese language know-how as I'm still studying for one. Besides, having Chinese language means good thing to everyone who speaks in Chinese in everywhere in the world.