On the contrary, the services that Google provides are very important. It's hard for me to imagine China in the role of technology leadership that they'd like, without the support of Google's services.
I think that China's leadership needs to give serious thought to what it'll cost them if their industry and their people can't (legally) use Google.
They did use to block google regularly before Google came in China... And Baidu is quite a bit more popular with Chinese people than Google so I'm not sure if that will be the problem...
What might be bad for China though is all the investment Google made on research and the PR disaster (and the chinese government is very concerned with face).
I think that China's leadership needs to give serious thought to what it'll cost them if their industry and their people can't (legally) use Google.