Given the capricious nature of the CCP as well as cultural differences, I would suggest that unless you are actually in china, you should not pin all your hopes on the Chinese market to make a profit. It certainly won't hurt to market to them, but for all you know, one year, your game might be perfectly Okay on steam there, and the next it is booted off steam for reasons you do not truly comprehend.
Not really. CCP considers Steam as a foreign platform working under WTO framework outside their jurisdiction. (Please do not get confused with Steam's regional store of China and the infamous "Steamchina", "Steamchina" is Perfect World's copycat project of Steam which is under full jurisdiction of CCP while "Steam's regional store of China" is still under the international/USA jurisdiction outside of China.)
Thus, there is currently no direct interference to Steam from CCP officially.
You can even buy Mortal Kombat at Steam's regional store in China.
As it's outside CCP's jurisdictions with little censorship. Players in China prefer Steam over local game stores. Thus, the Chinese player population is the 2nd biggest player group by region on Steam(only slightly behind the US.) Some game becomes the top Steam games by just conquering this group of players. (Yes...a certain immortal tale game.)
However, r18 content/ideologically anti-communism content/anti-ccp content are removed.
That is mostly because Valve does not want to be "Great Firewall"ed by CCP. It's self-censorship just like Hollywood.
(But, You can still throw in as much tomato juice in your game as you like. Your game is not going to be taken off just because it's full of violence/blood/gore, common sense still applies, don't do it too exaggerated. Even you can't put anti-CCP content, you can still put in anti-North Korea or anti-Soviet content as long as no CCP leadership makes an appearance in your game. None of their flags appear.)
Thus, it's quite profitable. It's profitable enough for Steam as an entire platform to even start self-censorship... They are afraid of losing it...
Fun fact: Culturally speaking. Players in China really really really really really really like r18 content on Steam as they can hardly get any from elsewhere. (Websites like pornhub are blocked by the Great Firewall.) They will even fake a Russian or Argentine ID (Previously, they also go to Hong Kong. But, some terrible things happened recently.) to jump into another region just to buy those games...(But, only a few of them can do it successfully.)
It really pisses me off that "GunSoul Girl" can be a top-seller in China.

(It's not taken off as it has some self-censorship. But, even with that, players in China still buy it...a lot..)