[elevensies]

I'm wondering if it would benefit them to be cut off from the world, but not each other.

Lets say China creates a partition in the bitcoin network between inside China and outside China. My understanding is that when they remove the partition, the longest blockchain "wins". If there is more mining power inside China than outside, that gives them the power to deny everyone outside China the ability to do transactions for the duration of the partition.

The network could be divided other ways, but I believe China is the only one who has the ability and incentive to do it. Although maybe you're right that the miners are connected enough to prevent it (I'm sure it would create chaos that would hurt them in the end). Although I don't know if the firewall is administered at the provincial level or the national level? I think it is much less likely for them to have national level connections since I believe the Chinese political system is controlled by ~100 people.