As a person who grew up in a country with culture that closely resemble China, from my experience, I can say that cheating in class is a common thing (at least in the city). It's frowned upon by teachers ofc, and if you get caught you're punished. But between students, especially people who struggle in class, talking about way to cheat before exam is not strange at all . The good students still gonna try to study hard for it, but even for a lot of them if an opportunity present itself, they gonna take it to cheat a little bit if they're struggling with or unsure about question (such as by double-checking the answer with another person). The level of cheating depends upon how important the exam is, how strict the proctors are, the level of the students,... but I think the biggest cause of it is because of society and especially parent's expectations toward student to perform well academically. Lots of parent hold view that in order to succeed, for their children to have a good future they need to do well at school (this is why parents are willing, even parents who are not that well-off, to spend money for their children to get taught by private tutor/go to cram school, a very common thing here) and part of it is also not to lose face with their relative/neighbors, this cause parents to have expectations that their children couldn't fulfill, which cause the parents to lash out by scolding, beating,... In order to stop that, either the children gonna try hard to study or they gonna cheat (most of them still gonna try to study to some degree tho). This attitude toward cheating for most of the school life end up influencing them when they grow up and enter society too.

As for cheating in a game, it's also super common, and lots of gaming cafe/pc bang do come with pre-installed hack tools. The reason for that I think is because they want to have as much fun as possible in the short period of times that their allowance and their free times from school and cram school afford them to spend in PC bang. They don't have the times and the money to spend hours practicing at a game, unless you're from a well to do family and parents that aren't strict about how much times you spend playing or you skip school.

This is of course only from my personal experience, and there are exceptions, and also maybe China is much different from my country than expected.