We've gone through this before.
Entertainment power isn't the same as soft power. Entertainment power - anime, K pop, Hollywood, etc. - is a form of commercial power, which bends to the will of the market, and can't really be leveraged to achieve political ends. Japan is not going to be able to use anime's popularity in China to get the Chinese government to give it better trade deals, agree with Japan in world affairs, stop contesting the Diaoyu Islands, etc. Same with the US and Hollywood; and Korea and K pop.
Where entertainment power is able to be successful, is in enabling more cultural exports and influencing people's market behavior - for instance, getting Chinese women to use Korean beauty products, encouraging Chinese students to immigrate to the US because they grew up with Hollywood movies and shows, making Korean guys popular among girls because they love K pop songs and romances, etc. That is by no means insignificant, but it is the extent of entertainment power.
Actual soft power is more ideological and political in nature, and it is always backed by hard power and media control. The concept of democracy falls into this category. Contrary to entertainment power, actual soft power is pushed by governments and their associated institutions, think tanks, and media instruments. Think Radio Free Asia or the National Endowment for Democracy. Or the thousands of human rights organizations supported by the West. In this form, they do have a direct effect on politics via pressuring weaker governments into ideological conformity, subverting the political clout of rivals, fostering domestic rebellion via "democracy movements," and so on.
China is weak in both entertainment and soft power, but not for the same reasons. China's entertainment power is weak mostly because it is still a developing country and its entertainment export industry isn't yet mature. K pop did not become popular until South Korea became wealthy and modern and dedicated tremendous resources to capturing global markets. Anime mostly flourished in a vacuum because it was the only animation industry outside of the US's. When conditions prove to be right, Chinese entertainment power will rise. Censorship is a factor here as creators don't want to have to self censor at every stage - this is actually becoming a problem in Hollywood due to social justice extremism - but honestly, most of the times it's just bad writing that's to blame for Chinese entertainment's current set backs and NOT censorship.
Actual soft power is a different matter, and I agree with most people here that China's soft power is being actively suppressed by the West and the Chinese government doesn't have sufficient hard power to break out of the Western containment at the moment. This is because democracy, the flag ship ideology of the West, has yet to become ideologically bankrupt - it remains the most popular form of government across the world. So when the US goes and says "we are the leaders of the free world and we will back anybody who supports democracy, human rights, etc." it carries weight and gets countries excited. While China going out and saying it backs dictatorships or autocracies, does not. People believe in democracy, its promises, and the fact that the West will back its ideological flag ship with $$$ and hard power. Until China can do the same, it will not succeed in the soft power contest.
But hey, people believed in Communism, too. Just because an ideology sounds great on paper, doesn't mean it works in practice - what matters in the end is its success in creating hard power. The Western led world order is slowly but surely collapsing. There will come a day when people no longer believe in democracy because they no longer believe in the West. That is when the West's soft power hegemony will come to an end and opportunities will rise for new leaders in soft power.
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There is no greater threat to free speech than those people.