China hasn’t indicated it cares a great deal about international law.
(One could make the same argument for the U.S., but that’s not the open question at the moment.)
International law’s got nothing to do with it.
Basically Every spacefaring has made it their policy that an attack on one of their satellites would be treated as an act of war and everything would be on the table in terms of retaliation
If China didn't care about international law it would've said it sent the balloon on purpose. Instead it found a cover story of some civilian balloon gone awry. They cared enough about international law to lie.
Because they fly a bit higher?
Yes. Sovereign airspace versus not.
I wouldn’t put it past the Chinese to deploy islands of atmosphere and release air in low earth orbit, and then declare that it is now part of the Chinese atmosphere before they start shooting down satellites.