Initial reports of J.R. Smith signing with a Chinese Basketball Association team have now been confirmed, reports Benjamin Hochman of the Denver Post. Smith's agent, Leon Rose, wrote in an e-mail that
"His decision to accept the deal was based on the uncertainty of the NBA labor negotiations, a significant offer from the club and the unique opportunity to play the game he loves in another country that loves its basketball."
Should the NBA and the players reach an agreement to end the lockout, Smith would not be able to play in the NBA until his CBA contract expires. The CBA passed a rule that forbids teams from allowing opt-out clauses in contracts. He could play the final weeks of the NBA season since China's play ends in mid-March (depending on playoffs).
As Hochman points out, Smith was an unrestricted free agent and was not a lock to re-sign with the Nuggets. With Smith and Wilson Chandler for the season (if there is one), the Nuggets now have Arron Afflalo, Danilo Gallinari and rookie Jordan Hamilton to play shooting guard or small forward.