As an American who lived in Hong Kong for a while pre+post handover, this news is particularly disturbing.
If the PRC wants to print out flyers and give away free flags and banners and distribute free food to local supporters, that's fine. There's nothing wrong with a foreign government using its diplomats and money to openly drum up supportive crowds per se.
However it's a different matter when we're talking about (A) promoting or sanctioning violence, (B) abusing diplomatic immunity, and (C) secretive astroturfing.
Hopefully that distinction is obvious, but I glumly predict that there are also a lot of people out there who will try to excuse the PRC by blurring the lines.