You're completely right. The purpose of such a system shall be used to maintain power but that's not the sole purpose of such a system. More than just benefiting the ruling class China wants to be better than and more powerful than the United States of America in every possible way. In order to do this their policies must benefit the working class as well as it is the working class that will be responsible for building a society that supasses the United States economically and technologically.
It's naive to think that China sole purpose is just to have a fat happy ruling class... as the status quo pretty much supports that already. Like all humans no one stays satisfied forever and China's ruling class wants to be better than the United States. Given the state of things China of course has ambitions far greater than your presumptions.
That being said there is a more immediate purpose for the system that involves changing people's' behavior so that they can avoid the tragedy of the commons. If you ever been to China you'll notice that people in general just don't care about the common good. Such systems stop people from pissing on the sidewalk or shitting out in an open field, spitting everywhere and littering cigarette butts wherever they please as this is much of what chinese people do without care.
Improving society is not just a gimmicky cover for consolidating power. It is an actual goal to be used in conjunction with consolidating power. Chinas' goal is to build a happy society that is more affluent and happy than the US but has less freedoms.
A similar system has already been tried in another country successfully. They used extreme punishment in place of extreme monitoring. See Singapore. In Singapore you can get the death penalty for possessing weed, not kidding.