No country would dare to impose sanctions or engage beyond diplomacy.
I do not think that the Chinese governments reaction or handling of the case is suspect, they likely want to shut down potential fake news. To label it as potential espionage is an ok measure until there was a conclusive investigation. If this happened in other nations, they would just declare it as a matter of national security and incarcerate whistle blowers too. Look no further than Manning and Snowden.
In other words, China will not face any harsh consequences.