Re: whatever’s wrong ...
I truly wonder if Xi doesn’t realize how ridiculous and Barbara Streisandy the Winnie censorship makes him look.
That may be the point. If you implement plenty of petty tyrannies, many people will get distracted from the real ones. If some of the clever kids spend their efforts bootlegging foreign films, they won't be putting them into real resistance.
I have a grudging respect for Xi. As autocrats go, he seems to have a very nuanced and careful grasp of power. His cult of personality seems to be extremely managed, not the sort of wild-eyed populism we see with Trump, for example, or even the still rather visceral "hard man is good to find" thing Putin promotes. His repressions also strike me as calculated, and often deliberately obtuse, to present a sort of circus of ineffectual resistance. Let the people enjoy inconsequential defiance as entertainment.
(Of course, this is by no means a novel technique, but as far as I'm aware it was mostly practiced systematically in pre-capitalist economies, as shown in e.g. Stallybrass & White's The Politics and Poetics of Transgression. There was a bit of it with the US Hippie movement, which was notable for achieving nothing but the neutering of a potential political opposition,1 but I suspect most of the US establishment genuinely loathed the hippies and it didn't occur to them to use the movement this way.)
1Unlike the actual civil-rights movements in the US, which did achieve significant change.