As a Chinese, I would say the Internet does have influence in China, and it's becoming more and more important for Chinese people. We have cases that some corruptions are exposed first over the Internet.
However, now the government is trying its best to control everything online, because it's currently an obvious threat to them. They've setup Internet filtering mechanisms, known as Great Fire Wall, to filter all the traffic in and out China. Also, they have a strict rule for web-sites in China, and they've already shut down many web-sites, especially blog providers, like Bullog.