Then there will be a big LAN in Asia without physical connections to the outside Internet, Resulting in another small Internet emerging.
And we know there are large harshpowers in China.
Then what will happen to Bitcoin?
Will there be two Bitcoin systems co-existing?
First of all this will never happen. What will happen to transnational corporations if they can't even establish connections to the outside world? It wouldn't make sense, otherwise the entire Chinese economy will shut down as corporations either shut down or relocate overseas.
Even if it happens, worst case scenario we lose all hashpower from China, which is actually a good thing. It keeps the network decentralized. I'm sure even if it does happen, there will be ways around it to use bitcoin.