That is not the case.

The Short Term Residence Permit, is for any foreigner holding a student or work permit in China, once they arrived in China, you suppose to register with local policy office (same as what we have in the UK for anyone stay here more than 6 months). This is enforced especially if anyone rent a flat in residential area living with local Chinese.

You can not get any hotel to issue such Permit, it's only be issued by local police force.

Back to the OP, CX (and Thai, China Airlines, etc.) do issue what we call Regional Fares in travel industry. They are cheaper than what the Western travel agents can offer through the three main ticketing platforms.

So they are only available within that particular region, with Ctrip more and more popular with us booking from outside China, I expect to see such restriction happen more often. Because CX know by applying such restriction, it stops us buying the same flight at cheaper price.