Why is there a fish tank in front of every chinese restaurant?

That isn't true, but many non-Chinese restaurants that serve fresh
fish also have   tanks displaying their fish, lobsters, etc. In China
you can find restaurants that also display live snakes.
It may be a German urban legend, but my son tells me that an aquarium
in an Italian restaurant shows that the place is paying its
"protection" money.

Just a quick comment-- I have traveled to Japan, Spain, Italy,
Singapore, and Korea, and can report that many Chinese restaurants
there tend to have fish tanks as well.

Basic Feng Shui is commonly practiced in Chinese households and
businesses; fish tanks are an integral part of feng shui. Those who
follow it believe that a 'black' goldfish is able to absorb bad
energy/luck and a 'gold' goldfish can bring great success to their
businesses.

Yes many of them do....(and not for eating).  I think it has to do
with beauty of the fish.  Just adding a thing of beauty to a
restaurant that the family is proud to own, sort of like decorating
your home for company.

As many Chinese restaurants sell seafood and customers prefer to eat
fresh seafood, so by showing fishs inside the fish tank in front of
restaurant, it is to let customers see their seafoods are fresh and
alive and so attract them to come in.

The Arawana, which you can find in some fish tanks at Chinese
resaurants is supposed to be good luck.

Not every Chinese restaurant has its tanks to show the fresh fishes or
snakes,but some good restaurants whose "kitchen stove" is good at
cooking those.Just an ad. to show their food is fresh.I come from
China,but do not often see so much tanks in restaurants.

Let me answer you cos i am a Chinese.
That's because the restaurants want everyone knows the fishes are
fresh and taste good.
They are delicious:P...