In some cases, a country will support criminal activity in an enemy country, in order to undermine the later. For example, al Qaeda has made a lot of money from trafficking heroin to Western markets – even though al Qaeda thinks drug use is sinful, it justified that as another way of waging war against the West (get enough Westerners addicted to heroin and maybe the West will collapse). And the North Korean government has been heavily involved in drug smuggling and currency counterfeiting – partly that is just to make money, but I'm sure they justify it to themselves by the harm it causes to what they view as enemy states. Indeed, during World War II, Nazi Germany used concentration camp slave labour to counterfeit massive quantities of British currency, in the hope that they could cause inflation and damage to the British economy. So a country might be happy to host a VPN to help criminals in its enemy country evade detection.
(I'm not suggesting China is doing anything like that right now. But, even if they are not, I wouldn't rule out the possibility that some day the China-West relationship might deteriorate to the point that it becomes something they might consider. )