Completely possible. Governments can block as many nodes as possible through IP filtering which wouldn't really work very well. A far more plausible way is for them to restrict its usage by using deep packet inspection to filter out and blackhole packets that either resemble Bitcoin transactions, blocks or anything similar. A mitigation would just be like how we are currently circumventing censorship, VPN or Tor.
Censorship can also happen on an entire network basis but it'll require a malicious party to hold at least 51% of the network's hashrate.
China as a country has well over 51% of the BTC hashrate.. They could at any point and time decide to run it into the ground or double spend on it..
WOuld kill the golden goose though and I suspect that is why it's not been done.