Second, I don't think we can conclude what would happen if China tried to censor.
China certainly has 51% attack capability against Bitcoin, but the only implication that of that which is clear to me is that they could potentially execute double-spends. Using 51% attack capability to orphan transactions is different.
With a double spend, there's two transactions, both signed with the same key, and no way to determine which is valid (which came first). There's no source of truth for that information.
With an orphaned block, there's only one transaction signed with the key, so you have a single source of truth. You know the transaction exists, and at some point (i.e. after a certain number of blocks), if the transaction isn't included in the chain, you can conclude with reasonable certainty that the transaction is being intentionally orphaned. This allows you to reject the chain that doesn't include the transaction as invalid, and choose the longest chain that does include it. We already don't blindly follow the longest chain: for example, blocks that are improperly formatted are already rejected.
This would, of course, having different criteria for what is considered a valid block would cause fork in the currency. There would be the Chinese censored branch and the uncensored branch everyone else is using. But for a lot of reasons, I think people would be unwilling to trade as much traditional currency for the Chinese censored currency as they would for uncensored Bitcoin.