I expect that the next step in this drama will happen sooner rather than later. It is Google's step, which will happen within these publicly-known constraints:
1. Google has announced that is no longer willing to "filter" / censor the search results on its Chinese-based search engine, Google.cn.
2. It is illegal to operate a search engine in China without filtering the results.
The interactionof these forces has some obvious and dark implications for the future of Google.cn -- which today has its opening-screen homage to the Japanese director Akira Kurosawa on the 100th anniversary of his birth today (March 23 = "today" in China). What it means for Google's many other operations in China, and its employees there, we'll have to see -- based on what the company says and the Chinese government does in response.
My before-the-fact speculation about what might happen, and why, from a discussion this morning with Kerri Miller of Minnesota Public Radio here. Stay tuned for what comes next, soon. UPDATE: What came next came soon, here.