This is actually something Hank Paulson comments on in his book "Dealing with China": the Chinese have a huge government, but they actually have something like a half to a third as many government workers per capita. And their comms infrastructure, despite the Huewai bruhaha, is severely lacking in comparison, so those additional people don't stretch as far.
What about their comms infrastructure is lacking? I got full high-speed cellular internet reception even in the deep countryside when I visited there last year.
