What the long-term effects will be: China's ruling class further cement their power at the cost of China's innovation and future growth. Interesting and useful things are made when people able share and consume information. e.g. Jack Ma's US visit exposed him to Yahoo. Ma Huateng was clearly inspired by his exposure to ICQ. The list goes on. The same thing happens in the West but it happens a lot more often since the…
Partly.
The exception is that the Chinese are pretty good at this stuff, and that 'blocking foreign companies' simply let's local companies dominate.
'SnapChat' and 'What's App' are no innovation. For the most part.
They are mostly just 'chat apps'. That's it.
Ok, Snapchat does a 'really good job' at the 'visual storytelling part'. But China does not need that cutting-edge level of social interaction for a few years until someone copies it well.
They'll do fine.
China is actually big enough - and their techies are talented/aggressive enough - that they can get away with a lot of these shenanigans.
You obviously have a good point though.