A recent ZDNet article talks about how China is rerouting requests for Google and Altavista to internal search engines, presumably ones that are more politically friendly to the regime in China.  Michael Robinson, chief technical officer of Beijing-based Clarity Data Systems is quoted in the article saying:

This is escalation.  They're not acting as administrators. They're acting as hackers. They're impersonating authority that they don't in fact actually have.

While I certainly sympathize with Mr. Robinson, I think the Chinese government (and probably most governments) would take considerable exception to the last sentence.  While we techies like to pretend that somehow the Internet is "above" or "beyond" national borders and that the "authority" that governs the Internet is somehow independent, the facts remain that sovereign governments still hold all the cards.  There's really no such thing as authority outside that granted by the various governments of the world.   We haven't even begun to approach the world described in Neal Stephenson's book Snow Crash (anyone got a three ring binder handy?). 

Mr. Robinson may be right and the Chinese may be wrong in the abstract, but unless China signed an international treaty agreeing to grant authority over DNS service in their country to some other organization, they have all the authority they need to do what they're doing.  I think we'll see this same story played out over and over again with respect to the Internet and other "global" players in the years to come.