Pretty frightening that they need to reiterate this (they mentioned this in the original announcement):
Finally, we would like to make clear that all these decisions have been driven and implemented by our executives in the United States, and that none of our employees in China can, or should, be held responsible for them. Despite all the uncertainty and difficulties they have faced since we made our announcement in January, they have continued to focus on serving our Chinese users and customers. We are immensely proud of them.
If the Chinese government is going to hold some google employees responsible (for whatever), do you think reiterating that statement is going do anything?
China is not stupid. They already look bad, and retaliating by ruining a few Google employee's lives is not going to make them look better. When China starts alienating the western companies, they are simply going to leave, leaving China with nothing. That would not be good for them, so I think they will try and avoid it.
The Chinese Government simply does not care what others think of it - especially the west.
All you need to do is look at the case of Stern Hu and Rio Tinto to find out how much the Chinese Government cares about its reputation amongst western corporations.
I don't think you're right. They seem to have a policy of strong censorship, but not at any cost. I think this applies to related are as well. Controlling the costs of their censorship is important to them. So, for example I wouldn't be surprised if one of the things they asked themselves was 'If we block Google completely, are there any services that we can't live without?'
