If you control the "last mile" infrastructure, you have a pretty good idea what's going on. If you control the mobile network, you can track everyone, and flash their baseband processor if you like.
(see also: concerns about Huawei equipment in our internet infrastructure)
The documents that Snowden released confirmed that this kind of thing was going on. To be honest, I don't think that really surprised anyone in the security community.
We just don't want China to have the same power to monitor our citizens as we have ourselves.