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The guy probably was just covering his face from the camera.
In Chinese factories there are dorms like this for the workers, this is probably a factories dorm or building. It's documented on pbs.org in an episode titled China Blue. I think it was an Independant Lens episode. Lots of forced overtime, pennies a day wages, 2 sets of books to show foreign investors who would frown on the actual conditions and their gov. But they had an extra daughter and it was either go to the city to find the job or live an entire life on meager the family home/plot of land. This is how stores can have every day low low prices on things.
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