I lived there for two years and maintain contact with people in Shanghai. They can give up their phones but life is VERY difficult without a smart phone there.

For the dirt poor Chinese a smart phone is the only “luxury” they have. The government doesn’t give a shit about those people and it doesn’t matter to them whether they track them or not.

People are giving up their phones so they can eat. Way more people died from the virus than the government figures state, but that’s not the explanation for the reduction in cell phone subscribers.