Actually this morning I was thinking about the inaugural and hopefully successful flight of Starship maybe next month. While it is meant to demonstrate capability to orbit, it won't complete it and is intended to crash land off the coast of Hawaii. I think it will be passing over China to achieve that. Maybe they would like interpret it as effectively an ICBM test - and by allowing these balloons to be shot down gives them some sort of tit-for-tat justification to bring down Starship earlier than Elon (and NASA, FAA, etc) would like. (Some sort of MAD muscle flexing)

Here is the submitted flight plan https://apps.fcc.gov/els/GetAtt.html?id=273481