Several reasons come to mind:
China will have a crew in the Surrey plant for ‘quality assurance’ capable of providing insight into Surrey’s design, engineering, and manufacturing methods. In other words, reverse engineering/industrial espionage.
China could do it themselves, but can’t beat Surrey on performance, cost, and schedule.
China could do it themselves, but they’re so flush with cash they feel compelled to ‘spread it around’ a bit. Of course a by-product (buy-product?) of the effort is the Brits become more comfortable sharing with China, selling to China, and become indebted (so to speak) to China.
Surrey really needs the business.
The authorities are aware of the potential problems and have taken some actions to try and mitigate the technology transfer/intellectual property issue (and from the Space News article):
The Chinese customer will be able to command the satellite to take images of a given area, but will not have control of the spacecraft. No Chinese engineers will be trained in satellite design for the program, and for the moment SSTL [that is, Surrey Satellite Technology Ltd.] has no intention of launching the satellites aboard a Chinese rocket. These concessions were made to reassure British and U.S. government officials that the transaction steers clear of technology-transfer concerns, which in the United States are known as ITAR rules, or International Traffic in Arms Regulations.
So I guess the Chinese control the sensor while Surrey flies the bus. And that’s my emphasis on “for the moment.”
One thing I’m sure of: China isn’t doing this out of the goodness of their hearts.