Western companies including Cisco Systems Inc. are poised to help build an ambitious new surveillance project in China—a citywide network of as many as 500,000 cameras that officials say will prevent crime but that human-rights advocates warn could target political dissent.

The system, being built in the city of Chongqing over the next two to three years, is among the largest and most sophisticated video-surveillance projects of its kind in China, and perhaps the world. Dubbed...