It's nearly impossible to get a factual grounding of the status of LGBT peoples in China through English media, since rainbow imperialism has been fully weaponized against designated enemy regimes. Western media describes China's official policy as "no approval; no disapproval; no promotion." I can't find any literature that actually attests to this as written policy, but even if true, this position has given relatively meager ammunition for atrocity propaganda so far compared to other fronts of propaganda assault against the country. China is the chief designated enemy regime today and the only major thing I've seen thrown is primarily the "muh censorship" shtick. There is an undeniable fact that organized LGBT groups can and have been appropriated by Western interests in terms of NGO collaboration with Western funding and support, however. The chief obstacle to securing LGBT rights in China will never be the allowance of these dubiously affiliated groups, but overall societal reception. With the latter, wholly independent and organic means of collective organization will naturally form.

Through my personal trawling, the current situation as I understand it is that the more conservative elements of Chinese society see it as a foreign intrusion, similarly to how reactionaries in Russia view LGBT there. Uniquely, however, the main hurdles are mainly cognitive however and can be overcome by LGBT allied advocacy:

• LGBT toleration is not against Chinese historical tradition. There are countries where historical tradition is legitimately in opposition with the fight to secure LGBT rights. China is not one of them. The core of heteronormativity doctrine that prevails today across the world is derived from Western Christian dogmatism. However, China has had a long history of homosexual toleration and practice before heteronormativity was imposed at gunpoint by the proliferation of Western Christian missionaries, whose allowance to propagandize the population was a stipulated condition enforced onto China after the First Opium War by the Treaty of Nanjing. Paradoxically, conservative groups intent on defending Chinese tradition are in reality preventing the restoration of China's historical tradition of toleration in favor of the 19th and 20th century Western imposed heteronormative dogmatism.
• The latest concern is that for those who see China's aging population as a national security threat, they consequently therefore see LGBT peoples as abetting this demographic trend. This interpretation of conjoining LGBT liberation with declining demographics is entirely unfounded. Not only is a truly LGBT tolerant society no obstacle to stable demography, this is putting the cart before the horse.
  • The principal impediment worldwide to declining fertility rates is the absurd cost of living for the global Gen Z and Millennial generations, particularly housing costs, and China is not an exception here. As usual with Western coverage of China, if they screech something is going to collapse the country, it's more likely a good policy decision. The recent popping of the real estate bubble is the government's campaign against the skyrocketing housing prices. The fixation on enforcing heteronormativity to "resolve" demographic trends is therefore completely misinterpreting the issue.
  • LGBT peoples are not categorically anti-natalists, the clarification of this point must be fully advocated. In the current medical context, LGBT peoples will only be a contributing drag on demographic conditions if they inhabit a social and legal jurisdiction which inhibits their ability to participate in child rearing. A society that establishes an institutional adoption progress by LGBT parent aspirants would find that they are no more proportionally inclined to anti-natalism than heteronormative peoples.
    • Additionally, the developing medical context in terms of reproductive technological advancements see the real possibility of neutralizing the biological hurdles to LGBT contribution towards birth. The promotion of achieving this technological condition would be entirely synergistic with China's national objective of ensuring the vanguard of a socialist state at the leading edge of human biosciences advancement.
• I've seen it suggested from a geopolitical basis that the calculus of securing the liberation of LGBT peoples would alienate China from its Global South colleagues whose societies face similar objections to advancing LGBT rights as neocolonial assaults on traditionist lines, along with the weird social conservative bedfellows that are currently chummy with China, like reactionary Russia and (wtf) the German AfD. The logic of this cynical argument must be connected to the reality that China, by its nature as a socialist state, alienates the capitalist elites (and therefore the media culture) of Global South and capitalism restoration countries like Russia far more than LGBT rights ever will. If the goal was to make Global South social conservatives happy, the logic of that sort of accomodation followed to its conclusion would lead to the overthrow of socialism in China. Rather, China must remain at the vanguard and set an independent standard for how the Global South can liberate LGBT peoples without resorting to the commercial and imperialist appropriation and two-faced perpetual legal and political semi-toleration of LGBT in the West.