Brian, to understand the difference between the underground church and the three-self government approved church you need to visit them... but for most Westerners the best that they will get is the book 'The Heavenly Man' which is about the house church movement.
I've been to both three-self churches and house churches, the Chinese believers are Spirit-filled in both, unlike what the last post might have implied... but the house churches definitely do live with more authority because they're not afraid.
If you've read Pilgrim's progress there's a part about Mr. Fearful... the way that I think about it is that the three-self church is like Mr. Fearful, very timid and slow, but still going in the right direction. While the house church movements are radically pushing forward.
Also, there tends to be less heresy in the three-self churches, because as much as there is government censorship of sermons there is also open teaching, so there's a chance to hear about more than one doctrine.
I've been to a three-self church that was bursting... people were hanging on the walls, it was standing room only shoulder to shoulder, and there were at least a thousand people standing outside the doors trying to listen... I would say that that was a Spirit filled church, not by numbers, but for the Zeal of the word.
Now the problem that your young man seems to have is that he was probably raised in a three-self church in the city which, because of political preasure, has all but denied the existence of an underground church... I know Chinese Americans here in the United States who deny it's existence even though we have freedom of press and they can hear about everything going on in the persecuted church.
Now Religious persecution isn't the same in every province of China. There are some areas where Christianity is seen favorably, or at least dismissed as innocent by the local authorities. Really when it comes down to the persecution of Chinese in China, it's not a national decree but instead religious issues are handled on a province by province basis.
So while there may be horrible persecution in one province, there might be relative peace or even acceptance in another -even if they border eachother.
There is a chance that this young man was sheltered in one of these safe harbors where he could practice freely at a three-self church, share his faith openly without fear of persecution etc.
All that being said, this young man needs to know that you can't be a Christian from birth... almost every other religion in the world teaches that you're whatever religion your parents were (including Buddhism and Animist beliefs in China). So you need to break him of this false idea and show him that he is in need of Salvation.
** Edit
Both the three-self church and the underground church are suffering. In some provinces even though three-self churches are approved they are still routinely threatened, abused and openly criticized by the local communist party officers. Three-self doesn't mean clear sailing from abuses. Sometimes making an open profession of faith in an unpopular religion is MORE dangerous than hiding in the underground church.
I visited a three-self church where I met a woman who was in her 90's, she told me about how her husband and three sons had all been killed for professing Jesus as their Lord. She didn't tell us with anguish, but with joy, for she knew that she wasn't long off from seeing them herself.
It'd be a shame for that kind of testimony to be hidden.
I'm not trying to take anything away from the persecution that the house church movement has recieved, I'm just saying that it would be ignorant to dismiss the three-self church movement when it is growing and preaching the Gospel. All I'm saying is, hold your criticsm until you see it for yourself.
*** EDIT EDIT
Brian, I was just thinking (as I went down the hall to grab some pop-tarts) that you shouldn't discourage this young man by attacking his claim that he's been a Christian from birth... but instead get into the bible and show him that he needs to make a decision for Christ himself. I can't help about thinking about Cornelius' family... his whole household came to know the Lord, which means that it's possible even for children to be included in the decision that their parents make... but they have to affirm that same decision themselves when the time comes.
