Since you will make profit from sales in China (according to your emails posted out by cindyfxx), it can not be legitimate(it is also illegal under PRC laws and regulations, if anyone says its legitimate in China, he/she is lying, and by all means, not getting punishment cannot make a illegal action legitimate). I understand that this permission goes against federal and state IP laws, plz ask your domestic lawyer for further advice.
Cindy told me you would send me this message. Thank you for your concern, but it is not needed. Cindy and juefeifei and anyone else can do whatever they want with my fanfiction. If they want to sell it in China, that’s just fine by me; if they want to keep whatever they earn, that’s just fine by me; if they want to send me some money, that’s just fine by me. This isn’t something that I sought out–Cindy contacted me about it to ask permission and I gave it–and I’m not looking to make any money off of this. If I do, great. If I don’t, great.
If you are very concerned about this issue, then I kind of wonder why? Fanartists sell their work all the time online, in America as well. I see prints and coffee mugs and T-shirts of Captain America, Hannibal, and other fan artwork being sold all the time on Tumblr. I have had Supernatural fanfiction that I wrote taken and printed and sold in an anthology here in the United States (without my permission, which I thought was kind of rude–at least Cindy asked for permission!).
juefeifeifei is an extremely talented artist and I am delighted and excited to know that she wants to illustrate my story. I can’t wait to see what she will make! No, it’s not technically legal–but a lot of what fanartists and fanwriters do is technically illegal, or at least very questionable. If you have a problem with what they are doing with Revenant then you sort of have a problem with fandom as a whole. The things we create, the stories we write….none of them are approved by the original creators of any TV shows, movies, or comics.
So no, it may not be legal, but it’s legitimate in terms of me having given my permission for them to do whatever they want with my fanfiction.
In the US, fair use does not depend on whether any profit is made,. It is only one of many factors. In fact, there was a recent US court decision that held that Google’s scanning of books for indexing purposes was transformative use even though profit was part of the reason they were scanning.
The laws in China are a mystery (and their application even more mysterious and riddles with inconsistencies). But here in the US, we have a bit more clarity.
The poster also assumes that there will be profit from selling the fanbook. Most often these small scan fandom efforts do not net any “profit” - the cost of production is usually covered by the money charged. Keep in mind the cost of production in the economic world includes the artist and translator labor in addition to the cost or printing and shipping. I’d suggest that juefeifeifei keep track of her costs and offer that up in case there are questions.
tl:dr: Selling fanart or fanfic does not automatically make it a violation of copyright in the US.
A totally different issue - there is also a long history of fans selling -usually a cost, but not always - printed copies of their fanfic or their fanart. By long history I mean 40+ years. In the US they are called fanzines. In Japan they are called doujinshi. There is a huge market in China for doujinshi (including “slash” also known as “yaoi” or “dan mei”) . Doujinshi are bought, sold and resold openly on the Chinese version of eBay and in many other locations in China. This means that this one fannish effort - translating a fan story into Chinese, illustrating it and then selling hard copies - is not unusual.
However, those living in China do need to keep in mind that slash/yaoi/dan mei is not always considered favorably. Again, much of the doujinshi sold in China is slash, but I do not know how much is printed and manufactured there. These are issues that juefeifeifei and her friends need to consider separately from copyright issues.
Read more about the history or printed fan fiction, fanzines and doujinshi at Fanlore, the fan run, non-profit wiki about fandom.