It's what decisions are made with that data that's the concern. A lot of "privacy advocates" believe that society can exist with the government not knowing anything about their population. I can't think how:

• a transport service can operate without knowing where people go and when
• consumer advocacy can work without knowing what people will buy
• what needs to be addressed in society without knowing what the issues are
• what to educate people on unless you find out what they don't know
• a health service can adapt to the needs of aging populations without good fertility data

You're right, all this data can be used against someone for malicious reasons and like in the China example it's easier to locate dissonance by listening. But evil can be done without data collection, it's impossible to do good without it.