Commercial surrogacy is already illegal in both the UK and China, yet this has happened anyway. The case sounds complex- only one baby buyer is a UK citizen, he is originally Chinese, I wonder what strings he could pull to get officials there to ignore the law.
The other guy is not a UK citizen and both men live in a third country.
Whilst I don't agree with the outcome, I'm struggling to see another outcome that would have been preferable. Handing the child back to his mother probably wouldn't have helped- she didn't want to admit she had been part of such an arrangement, she may simply have sold or abandoned her child again. If the child was deported back to China I don't fancy it's chances in the Chinese care system (but I could be wrong on that).
Possibly the best outcome would have been to bring the child into the UK care system, but it's worth remembering our care system costs a lot of money for quite poor outcomes, which is why the authorities aren't keen on bringing more children into it unless they absolutely have to. Also, how you would enforce this whilst the child is in a third country, I don't know.
This is the mess international surrogacy causes.