From what I've read, Google's reaction has less to do with Chinese censorship and more with the fact that someone in China hacked into Google. The attack is pretty sophisticated and looks like it may have come from the Chinese government. The whole issue brought this image to mind...
Jules: Does Google look like a *****?
[Jules shoots China in shoulder]
Jules: DOES HE LOOK LIKE A *****?
Jules: Then why you try to **** him like a *****, China?
China: I didn't.
Jules: Yes you did. Yes you did, China. You tried to **** him. And Google don't like to be ****ed by anybody, except Mrs. Google.