I lived in China for a while, and my wife is from China. We moved out almost 5 years ago, and she still was a bit freaked out about a picture of Xi Jinping's book next to Winnie Pooh book I took at a Book Expo here in Germany. Once you lived 1-2 generations with censorship, this gets from "chilling" (as in, you're aware of the thought but suppress it) to "not even thinking about it".
I don't know if it's a net negative on society, in the end in China people are very apathetic towards all of this, their lives are fine, they can get food delivered in 5 minutes, trains run on time, flying cars, and all that. Bread and circuses, bread and circuses.