It was a test station only and has served its purpose. It was not planned to be used any more. They did lose control which means they now can not deorbit it in a controlled way into a predetermined area. Usually structures that are deorbited in a controlled way end up in the empty South Pacific. But the risk of any damage caused by the station is small. The Russians once lost a satellite with a nuclear reactor over Canada.

Work on a larger permanent station is ongoing. Underestimating the Chinese space effort would be a major mistake.