China's Censorship is Increasing
In some ways China's censorship and control is increasing. They've recently changed laws to restrict information about businesses for example, as this would expose corruption. As a scary example, a US citizen of Chinese descent businessman a couple of years ago (name of Xue Feng for reference) was arrested in China for buying a database of business information. All of the information was openly available, but the Chinese authorities declared that the collection of it violated State Secret laws by compiling the information in one place. I haven't seen that database but I suspect it's basically somethng that shows the web of ownerships and deals between companies in a way that makes the corruption obvious. A couple of years ago, China also required all mapping and location services to seek official approval. Public information is becoming more restricted - for example, it's frequently now the case that you can't even look up land ownership records.
China is currently undergoing a bit of a power-transition with some of the old guard moving out and their new chosen successors moving in (don't picture the new players as youthful though, just less ancient) so I think tension in social control has risen slightly. China is very pro-active at slapping down unrest even before it really starts. Chiefly what they like to do is focus on blocking two things: social organization of dissidents and exposing of corruption.
One of the most telling things is how Sergey Brin of Google was so shocked that China had managed was "putting the genie back in the bottle" over online censorship (his words). He had thought that the deployment of the Internet, search engines, chat rooms, etc. would inexorably lead to greater freedom. Conceivably it still might, but right now it has gifted the Chinese authorities a new way of listening, watching and silencing. Google has had twin shocks of this and seeing the Chinese hack into its servers and use Google for their own purposes. I would bet they're having a period of realization over the past year. Microsoft of course has no such youthful idealism to be shattered. They've long done business in China (and long been ripped off). Being abused by the Chinese authorities and wishing society there was a lot less corrupt is probably one of the few things they both have in common.
Poster above says it's about the illusion of free speech whilst controlling resistance. That's kind of the ideal game play for a corrupt state: tell people that the grass is red and they'll keep noticing that it ain't. Get them used to the idea that it's going to be red and they can't do anything about it, and that's easier to get away with. China doesn't attempt to convince its citizens that there is no corruption or that they will all have a pony, it attempts to convince people that they can't do anything about the corruption and they never will have a pony.
Of course they can have ponies, but they have to deal with the corruption in China and the way everything happens via Guanxi (you scratch my back, I'll scratch yours, who you know networks). That would be better for both the Chinese and for us in the West. Freedom is a good thing. And to act freely in the way one would want, one must avoid others controlling what information you can access and who you can support.