not a teacher
In the example you've given it seems that "set up shop" should be taken literally, meaning that the Chinese have established businesses in the camp.
However, the phrase can be used figuratively in many contexts to mean staying in one place for a prolonged period, or establishing a position.
The visiting team was clearly dominant and set up shop in the opposition's half for most of the game.
Larvae and grubs can also set up shop in ecological niches adults can't reach. (newscientist.com)
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