The story is that it was a political move to appeal to a broader market (i.e. the Chinese).

I've eaten there and it's certainly not Michelin quality.

The star rating has a rough correlation to price, better correlation to service, and none to taste, IME. Some of the better meals I've had were the 2s and 1s, and even restaurants that later went on to earn stars... the 3s were good too but most of them had a very stuffy style of service