In the local market, having a .cn domain name can lend you legitimacy, which can help you avoid being blocked by the censorship board.
Howerever you should not be blocked if you don't advocate anything prohibited, such as porn, gambling, or politics. It has little to do with the hosting location.
The hosting place is more about technical purpose, for instance if you have a huge website that requires to reduce download time.
if you need to host your website in China territory, you will need to get an ICP. see this article for more details:
https://nhglobalpartners.com/what-is-icp-license-how-to-get-one/#Why_You_Need_an_ICP_License