I think a balance is needed here:-
A lack of censorship and full-blown "dictator-style" censorshop are as bad as each other.
Pro internet freedom activists will argue it is up to parents to shield their children from the filth on the Internet. This is however practically impossible as children and teenagers are increasing in computer knowledge at a faster rate than the previous generation. A complete lack of censorship is all good until you discover it's your children viewing the pornography which helps subconsciously shape their view of women and men in society. Does it come as a suprise that the strongest anti-censorship activists are young people without children?
However full blown censorship in which a person cannot express his or her opinion is totally wrong either. Expression of opinion can help society grow and encourage debates in which society can come to rational decisions, which can in turn help develop society intellectually and morally. Dictators or political parties who dislike the opposition choose to silence their opponents through censorship which unfair, as this is enforcing their desires on the rest of society.
To summarise, are pro/anti censorship activists acting in accordance to their own desires or do they truely want the best for society?
As regards to China, unfortunately such laws will only be effective if backed up with physical brutality - another government tactic to forcefully enforce the law if society does not submit to the government's desires.
Proxies are simply the answer to such censorship or underground ISPs which I'm sure will be an emerging market.