It plays a large part in certain aspects such as mining. As far as I know it's never contributed to one line of Bitcoin's development.
"It?" I don't think any country, per se (or government) has contributed to Bitcoin's development. There are definitely Chinese Bitcoin developers. E.g. Johnson Lau is one of the most prominent Core developers.
but the size of China and its effect is greatly exaggerated in bitcoin.
A year or more ago, Okcoin and Huobi had immense effect on the markets. But with the end of no-fee trading, I'd say that is not the case anymore. Increasingly, I hear people referencing Japanese and Korean exchanges. The market leaders now seem to be Bitfinex and Bitflyer.
Also, even if you downplay the influence of Chinese exchanges on the rest of the market, there's no denying that the majority of ASIC manufacturing and mining power are located there. That's nothing to sneeze at.