They still do that, even in the nicest neighborhoods in Shanghai. I lived there a little over a year ago and it was poop central for the little ones on the street. Allegedly it results in faster potty training and one could argue that it cuts down on diaper waste.. so it could be called environmental, despite the horror is causes for the foreigners who witness it. Some parents did have more talent than others at aiming their child appropriately.

I was in a train going North-East from Beijing (can't remember where we were going, or more to the point, whether it was a 'rural' train or not) as little as 5 years ago, and the grandmother in the section opposite the corridor from us made here grandson go nr 2 right there in the middle of the train. Every time the train would swerve, the turds would roll from left to right and back :O| Cultural differences be damned, who in their right mind would accept this as a common practice...