There's such a funny mismatch of culture and display of poor international PR sense too.
Based on some cursory search, it looks like it's another one of those local-government-pioneered pilot/experiments [1] like the credit score (except there are dozens of cities in that pilot).
The second tier city local government, trying to tout their achievements at the national level, then goes on a PR spree [2] (probably to earn points for the local party secretary). They even proudly market it as "Guiyang has 'Skynet' everywhere. No matter where you go, there are eyes on you,". I can totally visualize the locals thinking, who wouldn't think this is cool and an indication of Guiyang finally being ready to join the ranks of the civilized world.
Meanwhile, nobody at the local level thinks (or has enough international context to know) that this is a huge negative rather than an achievement from the western perspective. They probably can't even wrap their heads around why wouldn't everyone want this. Smelling the big story, in goes the BBC also, presenting this story as this state of the iron curtain, straight as constructed from Xi's directives.
The 2 sides of the story are just living in very different worlds.
[1] http://www.globaltimes.cn/content/1093864.shtml
[2] http://webcache.googleusercontent.com/search?q=cache:eoO1dqE...