As far I know, the Chinese authorities reduce the network speed for encrypted connections, but most of them work.
Your neighbor probably knows very well the risks.
If he is not associated with activities considered unwanted by the Chinese government (Falun Gong, Tibet, Taiwan, Catholicism, rule of the Communist Party), you are nearly free.
They also tend to be much more lenient with foreigners, because they know very well, that you will soon leave and you are anyways totally incapable to incite a revolution. Of course if you are sent by a Christian church to find converts, then start the investigation by your church and leave out your neighbour from the whole thing.
What you should check: if you are on the VPN, all of your communication should be done there. It is particularly about the DNS requests, it happens often that all of the communication happens on the VPN, but the DNS isn't. Thus, the network eavesdrop will have a quite good impression, what could you do.
In your case I would use OpenVPN with a home server, but you know, opinions are like a...e: everybody has one, but nobody is really curious to the others :-)
And, you will have to live with a little network bandwidth reduction.
Note: it is pretty well visible, if your network communication is encrypted. To hide even that it is encrypted, you would have to use some tricky network steganography. You don't need it, chinese allows the encrypted traffic, only they reduce its bandwidth.