Am I correct to assume that the reason for VPN isn't to keep people from seeing what you're sending or receiving, but rather to open a clear path to the outside world (to avoid China's internet blocks)? That by using a VPN China can't tell what part of the 'net you're accessing because it's essentially encoded at the source (the company offering the VPN services)?

Having just returned from China, this issue is quite interesting to me. I was getting my 'net services via simcard (China-Unicom 3G most of the time) and found the blocking to be highest in Beijing, a bit less in Xi'an, and almost non-existant in Shanghai. I was quite surprised that it would vary by region. The most-obvious issues were with Google and Facebook.

If this is something not comfortably discussed here, feel free to delete this post. Thanks-