Bet let’s stay with my initial theory. It’s possible that Google is/was poised to make a move on Baidu in terms of market share. However, Google is the very public and visual face of western liberalism inside China (and much loved by the people; flowers outside HQ..). Faced with the unpalatable dilemma of finding capitalist running dogs merrily camped on their doorstep (grrr), the ultra conservatives decide to make a bold move. Having discovered a cunning way to attack their target behind the back of the mainstream and executive CCP and without getting caught (the one necessitates the other), the Ultras lash out and from behind the scenes, orchestrating a massive cyber attack on Google.cn and others in their camp.
Sergey Brin, Google boss, naturally freaks and decides to blow the whistle which he backs up with an ultimatum. The central CCP denies everything. The point here is that for the centrists and the ‘lefties’ in the CCP, it’s perfectly clear who the culprits are, it is themselves… I mean it is the other CCP, the ones I mentioned before, with the jack boots poking out from the bottom of their suits.
This division could be seen as just one episode in a series of events that have been plaguing the Party top brass since early last year when the effects of the economic crises were being felt in China.
The centrists and leftists in CCP tried to play down the whole issue but the dye is cast. Hillary wades in, Barack stays clear.
I am sure that within the party there is frustration with the hard-liners for this attack. It will only make domestic and international public relations worse, something that the CCP is very sensitive to as it’s ongoing position on and view of its own population is one of ‘don’t get them wound up; keep them pacified whilst we grow, grow, grow..’.
In short, it’s apparent that the whole episode has backfired on the hard-liners. The international liberal movement can justifiably celebrate a victory in the form of an Ultras own goal.
Unfortunately the celebrations are somewhat dampened by you know who:

This could’ve, should’ve been the perfect opportunity for US president to softly chide the CCP, even on a personal level. His noble restraint and understanding tone would have had many times the force of Clinton’s yapping. If only the Administration knew the Chinese Zeitgeist a little better. But the Americans are, and always have been, the kind of essentialists that Edward Said famously describes. How do they expect to lead by example?