The critical item is water. At this time water is still considered unavailable on the moon, but there are signs that water ice might be present near the moon's south pole, in the permanent shadow from direct sunlight.
If the Chinese set up at that point, and it is the only place with water, they will essentially own the moon.
Maybe they are doing nothing more than what we did in the 50s and early 60s. Remember all the neat stuff that was going to happen? "Free" energy from fusion, nuclear airplanes, mining the asteroid belt, building a new Panama canal with A-bombs--exciting time. Got a lot of kids interested in science and the country united behind the Mercury and Apollo programs.