Chill out, y'all.
I think one has to understand the strategic aims of the Indian and Chinese more than anything else.
The state of Jammu and Kashmir, if you realize, has immense strategic value. It is a gateway from central Asia to Pakistan/India and hence the sea-lanes of the Indian Ocean. The stakes are bigger than most of us can imagine.
For a start, I've never believed that Pakistanis really sympathize with Kashmiris. They don't give a ***'s a$$ if every one of them dies at the hand of Indian soldiers, as long as India gets egg on it's face. They don't speak a word about Ughiurs (my Chinese friends will resent this reference, I'm sure)..............It's all about '71!!!!
The Chinese, on the other hand, really need control over that region because it offers an alternative land route to receiving resources as opposed to the sea route that, again, passes through India's region of influence. IMHO one of the biggest reasons for the China-Pakistan love affair is this strategically important region. Everyone has a stake there, Pakistan's is based on revenge/loss of face- India's on Ego/Strategy and China's purely based on strategy.
Moreover, IMO the Chinese are passively aggressive as a nation(as opposed to being remarkably balanced as individuals)-their long-term strategy is of throwing out a firecracker like this once in a while and seeing how India reacts, and then deciding on what to do next. It's more about reminding the other that one still has leverage in a topic.
Tibet is a lost cause for India- it was a strategic blunder to recognize Tibet as a part of China without solving the border dispute, but it's too late for that. Almost. India still has some leverage as it hosts the Dalai Lama- something that it uses very occasionally and subtly.
Last I heard that China was reconsidering the decision to deny the visa, and that conciliatory noises were being made from both sides. In a week, life will go on and the great game resumes.