It’s possible this is less about comms or cost, and more about occupying an orbit with high utility. I think of it as just an extension of PRC’s “rape the oceans” policy.

That is a common approach by the PRC in pretty much everything, consume every limited resource as fast as possible before others can consume them, space orbits included.

Sun-synchronous orbits are great for spy satellites. One might wonder if this is a dual-use constellation. Of course the US is doing something similar with Starshield.

It has a really good balance of engineering constraints.

High enough that atmospheric drag doesn't require constant propulsion to maintain orbit.

Low enough to get some radiation shielding.

Lower orbits better for communication latency and imaging resolution.

Also sun-synchronous orbits are in this zone.

Good balance for coverage vs number of satellites.

There are a lot of strategic reasons why this altitude is ideal.

They're internet broadband satellites, they want low latency connectivity, as does SpaceX and everybody else launching them there. It does also cost more to reach higher orbits, and more to stay in much lower orbits for any length of time.

What I have previously heard, is that the current generation of Chinese rockets cannot place these tiny satellites precisely into a lower orbit. And so they are choosing to go into some of these more traditional orbits, where not only is there more density of spacecraft, but also objects take a lot longer to naturally decay their orbit and fall back to earth.

The consequence here is that a space debris problem may last hundreds of years.