It's because of some new regulation that was enacted recently. I tried and buy a China Mobile SIM card at the big shop in 百汇商场, they said I'd need to get a Chinese friend to let me use their ID if I wanted one. You can't apply using your passport anymore.. Then I went to China Unicom and I got one right away no questions asked. ;)

When people can't accomplish something, they typically make up stories.

One observation about mobile networks and internet as whole in China:

When accessing foreign sites, our home internet typically pings fastest to/through South Korea, Japan and HK.

But surprisingly, when I use China Unicom's 4G, the fastest pings come through Singapore and Australia.

Whatever that means...