One of the reasons they back down on China was because they could not compete with Baidu. It's not just the ethical 'I won't censor my results' (which in my own view, is a good thing).

I'm not sure how their decision went, but I assume that they did their research first to see if their changes would really drop their marketplace share too much. I'm not sure if China will block Google... if they do I don't think it would be much different than Google censuring their own results (the censored content would not be accessible). When people try to go to Google they would notice it's censored too.