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?
Fortunately the price of Bitcoin hasn't taken a huge hit yet. Any negative news is bad and even though it's just one country, it is a large country.
I'm hoping that other countries don't try to do what China is doing. I don't really think they can be successful because Bitcoin is psedo-anonymous. There will still be people in China that will hold Bitcoins because they have value. China will probably reverse course after they realize that they can't really control Bitcoin.