Before I go on a rant I will say that I have taught some very good, committed and hardworking Chinese students.
Now the rant. Yes it does matter because they devalue the learning experience of the rest of the students who as you say are paying high fees (though in the UK the difference between home and overseas student fees has reduced dramatically). A lot of UK university education, particularly at Masters level, is based around discussion based on reading the literature. When a chunk of the students cannot discuss, or even read, in English then the whole approach collapses. The other students then don't bother to read or discuss because what is the point. Assessment regimes have to change to cope with the cheating, so what are very interesting and student developing assignments are replaced with exams etc. Even the other overseas students complain about the Chinese students and their lack of English.
My (now ex) university years ago moved away from over reliance on the China market to a global recruitment strategy with students from over 100 countries. This year I had a class of 20 students with 18 different nationalities, wonderful.