Kai Chi Leung at the University of Minnesota has a very interesting PDF presentation highlighting the differences between Google Maps for China and Google Maps for the rest of the world. He concludes that there is censorship in the Chinese version of Google Maps (and the omission of the disputed Arunachal Pradesh area between China and India is a clear giveaway), but notes that both versions are available in China — so you can always use the international version if you want.
That’s similar to how Google Search works in China: The local version is censored, devoid of links that China’s internet censors disallows anyway; but the international version is also available, so Chinese surfers at least have an inkling of what they’re missing.
But the justification for the censoring of Chinese Google Search has been made on usability grounds: Google said it did not want to return links that don’t lead anywhere. That justification doesn’t work for labels and borders on maps — you don’t click on them to do anything.
The more likely answer is that Google is bending to demands of the Chinese government as a price for being able to operate in the country. At least this censorship stays within China, and doesn’t befoul the international version of Google Maps.
Note that Kai’s research is only for the map view of Maps, not the satellite view. I highly doubt there is a separate version of Google Earth for Chinese IP addresses. At least not yet.