They're having the conversation right now. Like there was a recent incident where LGBTQ stuff was banned off Weibo (Chinese social media) and there was a public outcry that reversed the decision. It's up to China to decide how they'll progress and I'm optimistic about it.

China's censorship laws are mostly designed for protectionist reasons, like they don't want their domestic film industry overrun by Disney or Sony. They'd rather have an internal market that's not bound to international businesses. That said, their censorship board is, for better or worse, operated by a bunch of stick in the mud boomers. Hopefully it'll get better with increasing awareness among younger people and changing trends. That said, the idea that China needs its government overthrown because it censors movies or that the state isn't as progressive as it could be? That's absurd and not helping anything.

I should also mention that homosexuality was mostly seen as normal or ignored throughout Chinese history up until the 19th century. It was a theme at the time that Britain or some other western power would start involving themselves within an Asian country and rewrite local laws, including restrictions on homosexuality.