CNN has a brilliant article about Internet censorship in China.
WHO (helps China censor the Internet)
Western corporations provide much of the equipment and services for China's Internet system. Major players include Cisco Systems, Nortel Networks, Sun Microsystems, 3COM, Google, Yahoo!, Microsoft, IBM and others.
Cisco Systems has been integral to China's Internet development. Its router equipment, which reportedly provides no anonymity or encryption and was specifically designed for China, is in the core of the nation's surveillance of the Internet.
WHERE (is censorship exercised)
Called wangba, or Net bars, cybercafés are required to keep detailed logs of customers' online activity on file for 60 days. If a user tries to access forbidden Web sites, a café must disconnect the user and file a report with state agencies. Penalties for violations include fines and even imprisonment.
WHAT (is censored)
Chinese search engines monitor content by keyword and remove offending Web sites. When people request banned content (for example: Revolution, Democracy, STD, Human rights) through Chinese search engines like Baidu and Yisou, the filtering system disconnects them.
HOW (to bypass the censorship)
People use proxy relays to get around Internet filtering and monitoring.
Tunneling allows a user in a censored location to access information through a tunnel to a computer in an unfiltered location. All requests run through an encrypted tunnel to a non-filtered computer, which forwards requests and responses transparently. Both private and commercial tunneling services are available.
Google censors search results in China
Free proxy list (anonymous proxy servers)