In a first reaction to the Google-China news I mentioned that if Google left, it would have little immediate impact on information-flow within China. "Why? Anybody inside China who really wants to get to Google.com -- or BBC or whatever site may be blocked for the moment -- can still do so easily, by using a proxy server or buying (for under $1 per week) a VPN service. Details here." But in the longer term, Google's departure might symbolize China's separation from the mainstream of modern, open, global innovation -- and might weaken its technological development and broader capacity to modernize and prosper, through the removal of a leading competitive force.
 
A reader who specializes in the history of technology sent this response to my claim about the effectiveness of China's Great Firewall to date:

"Analogously, in the information revolution following the introduction of the printing press, censorship in Catholic countries (especially Spain) had a similar "non-effect" initially because  there was an active black market in banned books. However, in less than 50 years, in the Protestant countries, where the press was not controlled, people of the crafts-producing class were able to become literate and change the way they produced goods. Over time this new way of producing goods became capitalism.  

"In Spain, Italy, Portugal and to lesser extent France people of the crafts-producing class did not become literate. They continued  producing goods in the same way as they had in the past. Soon they were out competed by Holland and then England where better goods were produced more cheaply. Over time this had a profound economic impact on the wealth and power of the various countries.

"Innovation by the "out group" based on access to the benefits of the new information technology that creates new sources of wealth and power. I would conclude, therefore, that China, having made Spain's decision to control information, is now out of the running for world leadership."

This is in keeping with one of my arguments about the Chinese government's potential to limit the country's development, here and here.