If the Great Firewall of China started blocking Bitcoin transactions, which could happen at any time, most of the mining power would go offline and transactions would stop. Or Bitcoin would fork to China and non-China chains.<p>Bitcoin is much more centralized than is generally supposed. The top three mining pools in China control Bitcoin, and they have a small number of large mining installations each. It's much more concentrated than AWS.
Bitcoin is taking away the biggest power that the governments have: printing money from thin air. They need it especially for paying their military. There may be a time in the future when it may worth for a government to protect Bitcoin for their people, but that time is not now.