I understand that some people choose not to do business with China. That's your decision. If you want to ignore the #2 market on the Internet that's fine with the rest of us who run Chinese language sites and market specifically to this part of the world.
I can only see this as Google distancing itself from the Chinese operation until it becomes more acceptable to do business in China.
Respectfully, I think you're completely off the mark on this one. This new Chinese name only further localizes Google to the Chinese markets. It shows Google's commitment to this space in a way that they have not done with any other market.