Technically China does have free speech. The problem is that the rules don't really matter. If you say something that offends a someone with guanxi with the right people, you're screwed.
It's the same reason foreign businesses struggle so much in China. If you aren't friendly with the necessary bureaucrats and your Chinese competition is, you'll find yourself blockaded perpetually for the most bullshit reasons.
Why do parents go jump through hoops and are willing to break laws to get their kids into top colleges? People often say bribery is rampant in China. We have Super PACS and political donations and revolving doors.
It's the same reason foreign businesses struggle so much in China. If you aren't friendly with the necessary bureaucrats and your Chinese competition is, you'll find yourself blockaded perpetually for the most bullshit reasons.