i'm curious about their claim about water causing that hole to form
happens all the time. not in china in particular but every where. tends to happen when you pave over where water flows and moves soil. look up the cases of huge football field sized sinkholes that happen in america.
also, pretty much all streets are hollow in urban areas. if you watch road work done you will see that they usually have some sort of support structure like a metal ][ so that sewer and other utilites can be ran under the streets.
when i was living in a coastal town there was a hole in the highway that was several yards deep, all that caused it was water over time and a lack of funding for repairing the pavement.