It's probably because it's safer as an experimental proof-of-concept.

Hydrogen leaks extremely easily, and there are large amounts of electricity going through it because of power generation, static electricity from wind in certain conditions, and, in case of hydrogen, electrolysis. All of this can be managed safely, but it takes a lot of blind faith in the engineers to assume it will all be managed safely on the first go.

If this one burned down in the most predictable way imaginable, the bureaucrats that greenlit it will look bad and the project will likely be delayed or canceled.

But if this one works, they can (request state permission to) develop a second design that uses hydrogen, and when that design works well they can start mass producing those without dependence on natural gas extraction.

You could go the SpaceX route and build multiple designs that you expect to fail catastrophically so you can get to building ones that work faster, but that takes a lot of faith from the people funding you, and a lot of willingness to generate pollution.

Its china, you really think they have regulations? And if they did they would be enforced if the system is making money?

But I agree, hydrogen is way cheaper and more efficient for unmanned dirigibles. Also I wonder how well it would burn at super high altitude w/ the limited oxygen?

And even if it did burn the fire would be out well before it hit the ground. Not like the Hindenburg that was low to the ground and its outer coating was massively flammable.

Fun Fact: The reason why they had to use hydrogen was we (the US) clocked them as an enemy prior and refused to sell helium to them. Sound familiar?