The censorship is not only about restricting access to foreign websites, but also monitoring internet traffic inside the country.
Google may have rolled out its cloud-storage Google Drive last week, but some 500 million internet users may never have a chance to try it out - those in China.
Having hit the country's so-called Great Firewall, Google Drive has joined a host of other services banned in the communist nation, such as YouTube, Google+, Twitter, Dropbox, Facebook and Foursquare.
When the firm checked for technical issues on its side, it found none, a Google spokesman told the BBC.
"If people are unable to access Google Drive in China... it's an issue to take up with the Chinese authorities," he said.
The restriction does indeed seem to come from Beijing, but it is not a surprise, say analysts.
The Chinese government has been notoriously unfriendly towards a number of Western websites and online services, mostly targeting social media networks and video sharing sites that could have a mass impact on "the community", notes Duncan Clark, a chairman of BDA China, a consultancy firm in Beijing.
"It's a question of control - and the Chinese authorities like to keep close control of web content, preferring to work with local internet content providers, on whom they can rely for self-censorship of content," says Mr Clark.
Cracks in wall
And to exercise this control, the state closely monitors internet traffic within the country and all web content that crosses its borders.
This Great Chinese Firewall uses several tools.
All internet traffic into China passes through a small number of gateways, giving the government a chance to control the information.
Sometimes Beijing will block access to a site that has been blacklisted by the government. The authorities may also prevent the look-up of certain domain names, thus causing a "site not found" error message on the user's screen.
If a site is not on any blacklist but its URL - web address - contains a prohibited word, the site may be blocked - and this may also happen if a prohibited keyword is published anywhere on the page a user is viewing.
Censorship can be done more subtly as well - for example by filtering posts with prohibited keywords on the country's social media platforms and erasing comments shortly after they have been posted on microblogging sites.
But the Great Firewall does have cracks.
For instance, in February US President Barack Obama's Google+ account was flooded with comments from China, after a gap in the firewall temporarily allowed Chinese users to access the social network.
"The Firewall doesn't work perfectly, it is in fact full of holes," says Hamid Sirhan, a strategist at social media agency FreshNetworks in London.
"To go round the restrictions, Chinese netizens use proxies - internet accelerators - to 'tunnel' through the wall, and they often work around blocked search terms by using sometimes-humorous homonyms."
Special software like JonDonym, Tor and Ultrasurf help web users to break through the Chinese government's restrictions.
Although it is possible for more technically-savvy internet users to access banned Western websites and services, most Chinese are perfectly content with home-grown alternatives, he adds.
And there are plenty of them. China is known for cloning the Western web world, with one key difference: these sites are self-policing and conform to local laws.
The government's restrictions on foreign web services only help local firms to thrive, says Mr Clark of BDA.
For instance, with YouTube blocked, China's leading video website Youku is thriving.
Sino Weibo, the Chinese equivalent of microblogging site Twitter, already has 300 million users - more than twice as many as the Western original.
With access to Google's search hampered by China's firewall, Baidu Tieba dominates the country's search traffic - without showing any search results that are inconvenient to the Beijing government.
Baidu may not let you find out much on the violent suppression of protests in Tiananmen Square in 1989, and many other search terms are censored, but it will deliver the right content for most common searches.
Baidu's latest cloud service Wangpan, announced just weeks before the launch of Google Drive, beats Google by offering 25GB of free storage - as much as Microsoft's Skydrive and much more than Google's 5GB.
Although banning foreign firms may give a short-term boost to Chinese tech entrepreneurs, it could hurt the country in the long run, says Mr Clark.
"What if these Chinese companies wanted to go global and succeed?" he asks.
"We all know that China is the manufacturing workshop of the world, but it is now trying to move up, to become much more interested in design, and the government wants to influence the image of China overseas, get it to participate in global industries.
"So if these companies are this much protected domestically, then in the long run it means that they're not as capable functioning overseas.
"But the government is more focused on the short term concerns about control and doesn't seem to think ahead."
And Beijing should also be wary of possible future discontent among Chinese netizens, he adds - not only because they are not allowed to access Google and other Western sites, but also because of the censorship at home.
When the authorities recently disabled the commenting function on local microblogs, they only managed to keep up the restrictions for three days - and then the service went back to normal.
"The state and the Chinese netizens have been playing a cat-and-mouse game," says Mr Clark.
"I will be interesting to see who will win - although I don't think Beijing is ready to give in any time soon."