Against all odds, the iPhone’s recent launch in China is proving to have modest success in at least one area, according to The Wall Street Journal — the App Store.

Apple has faced a number of challenges launching its ubiquitous handset in the Chinese market, faced with having to remove Wi-Fi from official iPhones and a large installed black market for unlocked and jailbroken devices already in use there. Worst among these are reports of slow launch sales of the official iPhone, but despite this, the Chinese App Store is still holding its own.

“The market for legitimate Chinese iPhone apps is small but surging,” the report claims. “[Chinese mobile application company 9thQ] estimates about $1 million worth of legitimate iPhone apps have been sold so far this year, though the market could reach $6 million by next year. By comparison, mobile advertising firm AdMob says about $200 million in apps are sold overall through Apple’s store each month.”

Games are proving to be among the most popular apps for China, which is no surprise given their universal appeal. “We have to consider what kinds of games are appealing to users from the West and the East,” said Mao Guangcan, chief executive of Beijing-based Colome Info Tech Co. “Sometimes, games we developed for Western users turn out to be bestsellers in app stores in China.” Their English-language prospecting game, Gold Miner, is generating nearly $59,000 per month in App Store sales.

Chinese iPhone owners are required to have a credit card issued by a Chinese bank if they want to purchase App Store content, which creates another challenge for Apple since few Chinese actually have such cards in everyday use. At present, most apps are in English, with prices in U.S. dollars instead of Chinese yuan.

“Once Wi-Fi is allowed on future 3G iPhone and the price of handsets falls due to product life cycle, more subsidies or economies of scale, we will see the iPhone market in China go mainstream,” summarizes Frank Yu, chief operating officer of app designer Shouji Mobile.