I lived in Beijing from May 2005 to July 2015. The main reason we left was the deadly air pollution, but a contributing factor, and not an insignificant one, was the tightening grip the State had on the Internet. I first began using a VPN in China after Twitter got blocked in June of 2009? (if memory serves). More and more sites got blocked over the following years making it essential to have a VPN, with Gmail being "the last straw" for the few remaining VPN holdouts when it got blocked in early 2015? (again if memory serves).
I cannot imagine living in China and not being able to access the global internet. I certainly wouldn't consider living there now, or even doing a semester of study abroad there, without unfettered access to the global internet (via a VPN). Maybe that's what Xi wants?