Due to the nature of Chinese telecoms, your national ID is bound to your mobile number account, which is in turn bound to your Alipay account, the one-stop mobile app that manages all monetary transactions, including banking.
If you lose it you lose access to Alipay, which is basically how the Chinese pay for everything; because of that people don’t just cancel.
When phone number accounts are not paid for a certain period, or if some other actor (relatives? gov?) shut down your personal account related to the country’s database, the account is automatically cancelled.