China is known to limit freedom of speech and has attacked activists' rights in the past. The battle over censorship in China recently took a new turn with cyber attacks on the Gmail accounts of known Chinese dissidents. In response, Google said it is no longer willing to censor its Google China website and will pull out of China if need be. Google was criticized for initially agreeing to censor content when they set up Google China.
Until recently, Google China users were unable to find information on touchy topics like Tiananmen Square where searches would not return images or information about the student protests. This could soon come to an end.
What happens now is in the hands of China's leadership. If they don't want to back down, there is nothing to force them to. They have the power to do what they like and if they don't want an uncensored Google in China they don't have to have one.
If any company has the ability and size to pressure China, it's Google. Google has been playing along for years and it's good they have finally decided to take action.
Google is only used for about a third of searches in China. Its domestic competitor Baidu controls the majority of the market and would be more than capable of taking over for Google. Google's threats are thus slightly less potent, because China can live without their services.
Even if this doesn't change anything -- which it likely won't -- Google deserves credit for at least trying. Their actions will provide leadership for other companies that want to put pressure on China. The United States has backed Google's message by pressuring China too and asking questions about the attacks on Google.
The pressure may not work, but it's better than nothing.