I have a sister that lived in China until problems were found with her daughter's passports (her's was just fine) and from what I've heard the censorship in China is wholly indefensible (in her opinion) and that on certain topics you could only guess at the truth (or accept what your told
), because the information you were given was so twisted that it (the truth) was wholly unrecognizable. Of course I've never been there, but I have been told that it has imprisoned more journalists than any other country on earth.
I can understand the censorship of some topics that are widely believed to be immoral, though the means with which this censorship would take place and the content which could be censored would have to be very clear and defined in a "fair" and non-invasive manner (I can understand it, I'm not for it). But when it is a government who decides what is considered "seditious" then I can't stand by it. Giving a powerful leader the ability to whitewash anything that makes him/her/them look bad (implicitly or no) is just asking for trouble. Honestly, I don't think there is a government on earth that I would trust with such a responsibility.
Why would a country need to censor "seditious" ideas, anyways? If they are ridiculous then you only need to rely on your ability to adequately explain to your people why it is so. If they aren't ridiculous then they shouldn't be censored in the first place. It is the people who should decide if the content they are reading is immoral or not. In my opinion, a governments role is to serve the wills of the largest number of its people possible, to the best of its ability, regardless of what that will is.
Also I've been suspicious of Google ever since they started that "Don't be Evil" thing. 
Firstly, since when was a government's role to cater to people?
A government's responsibility is to cater to
the people. If they were at the peoples' whims there would be nothing done because of the conflict in interests between the upper and lower class. Instead, a government needs to be hard-pushing, they need tax money, which, though it will negatively impact peoples' lives in the short term, will increase the prosperity of the state.
A good reason to censor seditious material is to inculcate a strong nationalism in the people. That way, in case of a war, China will have more manpower.
And yes, China may have a lot of reporters in jail but it has more reporters than any country in the world thanks to its large population, and again, free press and censorship do not jive very well together.
And about the passport...
Are you really sure it was valid? China isn't going to kick Westerners out randomly (assuming you are one), seeing as few Westerners live in China anyways and provide income for CCTV9, malls, and other companies. As long as your sister or her daughter had a valid passport and didn't really tick the government off they would still be there.