Here's another opinion from a different perspective.
Blocking can affect SEO, but you should think about this stuff:
How about blocking or filtering visitors automatically based on their IP address? When considering to block website visitors by IP it’s important to first evaluate the reliability of the IP address(es). The accuracy of an IP list is over 99.5% on a country level and 80% on a city level. The smaller the location, the less reliable the IP address.
The benefit of blocking the country via IP address would not only clean up analytical data, but also ensure sales funnel to be more efficient and provide a more accurate picture of real prospects in all systems.
Just to put in another perspective...
let's say 20% of your trafic is from China where you don't sell anything. What benefits do you have from that?
So... it's a bit tricky, but blocking is efficient to statistics, and you can do a better data analysis based on your 'real' customers.
Banning the country from your web will cut down the number of unsolicited calls, emails and web form requests. It will also give you much more accurate picture of how our website was performing within your own target market and service area.