Until a few years ago, they compensated by treating the internet as a free-for-all where they could spy at will; as people fought back and started to demand accountability and limits, they responded with a legislative backlash that is slowly making gains everywhere. The most authoritarian-inclined states (UK, France, Italy) have passed the worst laws, but others are busy following suit.
It's an ideological battle, and they are winning it. One day we will look back at the Chinese firewall as a pioneering effort.