Let's not all freak out just yet. People will find ways around this, including the VPNs and TOR. If those are blocked, I'm sure a lot of bitcoin users will simply move if they have to and still value bitcoin. I'm not entirely sure why China is cracking down on bitcoin so hard- anyone?
As far as I know, China is trying to control its capital outflows. Around 10% of Bitcoin trading happens in China, so I can imagine it being one of the larger factors for outflows. They've also been working hard to curb money laundering, which can apparently also be done with Bitcoins, so that doesn't help. That's as far as my knowledge of the topic goes, though.
If China is able to block all bitcoin transactions, I don't think workarounds would matter. We're going to be in for another ride.