I live in china. I have lived here for 11 years. I am western. I have friends who are in Shanghai and Beijing they are fully Chinese and either own companies or are judges or (sometimes) criminals. At no time and in now way have these people been shy about criticizing the government or swearing at the traffic jams created by state visits etc. At no time have I seen or experienced censorship. In many drunken evenings or in business meetings any and all topics are discussed openly. There are rules however, yes, the government needs to be involved in things. Yes it can act in unusual ways - for example banning online games. (seemingly because one high level official did not like the amount of time their son was spending on WoW.) Yes minorities are persecuted and yes they shoot criminals. It's is a long way from perfect. But... 1.3 billion people. There are 12 cities in china with a pop of more than 5 million (in the city local area) . These cities have highly complex local governments which do not always follow the central government. China is a lot less one country than it seems and it is certainly not policed or controlled with any obvious force.
In many ways it is also free. Sometime more free than other places.. this may sound weird but Hong Kong is again the freest place to do business in the World. It is many regions, many languages and cultures. As in the US, the government is distinct from the people. And the government has a hard job keeping it together. The only thing I agree with in the article is that going the Russian way would be bad for China. As for Google... as always the real story is probably much different from the one told by either side. But i am more inclined to believe it is something silly rather than serious.