This is getting interesting.
The big question-mark of the "Iron Man" franchise (before anyone knew about The Avengers plans, at least) was always how it was going to deal with the fact that the character's most (only, really) noteworthy villain was The Mandarin; a villain who while interesting in his own right is pretty-much a "Yellow Peril" caricature left over from the hero's heyday as a Cold War commie-smasher.
The first film teased his existance with a terrorist cell called "The Ten Rings" (Mandarin augments his "magic" with borrowed alien technology housed in ten rings) whose leader was obsessed with Ghengis Khan. Sir Ben Kingsley (who is half Indian and has played Eastern characters in Ghandi and Prince of Persia, among others) has evidently been cast as IM3's main heavy, though Marvel was quick to say that he was NOT playing The Mandarin.
BUT then the casting-call went out for Asian and Middle-Eastern extras, and now the film is going to the trouble of lensing in mainland China, so it's not too difficult to imagine some element of that will come into play. It's possible to do versions of dated characters like The Mandarin and make them work - David Lo-Pan is a memorable example, though that was 20 years ago...