It's true, and at least it was still in effect last time I was in Beijing. Google Maps even disable their map+satellite view overlay above a certain zoom level to mask this (only in China - cross the border to free Hong Kong and it works), but you can still see it if you turn on Traffic view.
Domestic GPS devices have a reverse transform to mask the effect, but the result is you can never be sure exactly where you are. Seems like Baidu maps have fixed their map+satellite overlay now, but when I visited, they had the same problem.
http://home.wangjianshuo.com/archives/20081109_all_maps_in_c...