So lying on a visa application is worse than immigrating illegally? Doesn't illegal immigration just get you deported?
The principle st play is everywhere in the legal system: the penalty for lying on a tax return is much higher than not filing returns; the penalty for buying something with counterfeit bills is much higher than that for simply stealing it; using a fake ID to buy booze (if under 21) carries a higher penalty than buying it from a clerk who forgets to card you; lying to sn FBI agent in an investigation is infinitely worse than saying nothing; etc., etc.
Also, there is no single "illegal immigrant" law or sentence, but I'm certain there are some laws violated by illegal immigrants that carry the same meaningless unused "maximum statutory penalty".
It is a common news media blunder of quoting the "maximum statutory penalty" - which is almost always irrelevant.
Having said that, in this case, if it's a political/espionage arrest then they might in fact use it either in negotiations with the Chinese or in sentencing to pressure for more cooperation.