Sorry to dig up such an old post, but I think I just recently stumbled on what these are.
These are not a modern innovation, but rather a modernised version of an ancient Chinese weapon - the mace, aka sword breakers.
Their intended role is to, as the name suggests, broke an opponent's sword.
Given that the most terrible recent terrorists attacks inside China have all involved sword wielding terrorist assailants, it only makes perfect sense for Chinese police to deploy hard counters against such weapons.
Sword breakers are best suited to being issued to patrolling police officers in densely populated locations like train stations and shopping centres, where:
A) use of firearms is going to be highly restrictive and problematic on account of the number of innocent bystanders fleeing for their lives in every direction.
B) where assailant(s) could easily get very close to the officers to launch surprise attacks like the recent Paris airport incident.
That was just one lone wolf, but if terrorists used Wolfpack tactics like they have done before in China, there is a chance that they might be able to overpower a small two man patrol. In which case they would then have firearms if those officers had guns.
With sword breakers, even if the terrorists can overpower a small two man patrol, they would only get blunt force weapons, which while capable of causing significant injury or even death, is going to be nowhere near as deadly as a terrorist with a looted police firearm.
C) as discussed above, if you have armed police deployed, you need to deploy them in decent sized groups.
Every time I see UK armed police patrolling in pairs armed to the teeth not even bothering to check their 6, I shake my head at the thought of how easy it would be for a group of 3-4 or more terrorists with simple everyday knives to overpower them and take their weapons. Then, suddenly you have two dead cops and 4 terrorists with guns, two of which are automatic assault rifles.
That's why armed Chinese PAP on deployment in places like Xinjiang deploy in a minimal of 3 man teams, back-to-back at all times.
But those are stationary sentries. For foot patrol, you need a good sized force. But that is a big draw on manpower.
With sword breakers, you can afford to deploy the cops on two man patrols to give you much greater coverage density.
You could also issue these to local police, to help with the PR side of things.
Move the gun armed units to stand-by rooms out of sight but nearby, and reply on cops armed with these sword breakers to maintain the frontline presence to do away with the under-seize/occupational force image problems.
These sword breakers are going to be considerably more effective at fending off sword wielding terrorists than your typical police batons, so they will be actually useful. But they won't yield the terrorists any especially useful weapons if they do manage to overpower the odd patrol during an attack.