An interesting article from Time. In the end, they conclude that he does matter, as evidenced by how strongly China wages a war of words trying to discredit the spiritual leader of the Tibetan people.
In recent years, the Dalai Lama has ceased talking about a free Tibet. He is willing to negotiate an autonomous Tibet within the dictates of the Chinese Constitution (yes, they have one), which would limit settlement by non-Tibetans. It may be too late. Some estimates now suggest that only 1 in 3 people living in certain regions of Tibet are Tibetan. This site offers some facts on the Chinese settlement of Tibet.
In Tibet today there are over 7.5 million non-Tibetan settlers including Chinese and Hui Muslims while Tibetans inside Tibet comprise only six million. The increasing Chinese population transfer into Tibet has reduced the Tibetan people to a minority group in their own land. The marginalisation of the Tibetan people has resulted in exertion of Chinese control in all spheres of economic, social and political life.
You can get two sides (China's and Tibet's) to the whole situation at this site.
I think the real indication that China fears the Dalai Lama is that they now require all reincarnating monks to register with the state. Further, they have said that they will be the final word on the reincarnation of the Dalai Lama when we passes. This is an important step for the Chinese government. They have already imprisoned the Panchen Lama (the second highest ranking monk after the Dalai Lama) and placed their own choice in that role.
If the Dalai Lama did not matter, China would not be going to such great lengths to discredit him and to generate their own replacement for him when we dies.
It's time for the world to stand up to China and demand autonomy for Tibet. With China trying to become a major player on the world stage, they are uniquely positioned to be responsive to pressure on this crucial human rights issue.