There are already some great answers addressing details of weaker provinces in China so I am not about to repeat them again and focus on why oversea investment not being used in China’s own development to improve those weaker provinces.
There are few key points explaining why China invest in other countries rather than its own:
CREATE GREATER NEW MARKETS
Since 1979, China opens to the world, international trade has been progressively increasing. Trade surplus let China become rich, very rich. Chinese government has made well use of these income to develop major cities (1st and 2nd tier), and spreading out to 3rd tier cities.
This national scale of development cannot just rely on internal consumption to generate self sufficient income. International trade makes the whole world as a big market for China made goods.
Initially, America and Europe are major markets. When Chinese manufacturing sector becomes more efficient, its productivity will exceed total demand one day. Chinese government has long term planning, to help poor countries to become new customers with spending power.
Infrastructure is critical for economic growth help moving goods for export. This is a proven experience in the rapid development of China.
China invest overseas to grow future new markets. Long term strategy is to help them to get rich and affordable, rather than help feeding them only.
Thus, China invest in infrastructure, basic facilities and education for those countries, in order to turn poor countries into customers with buying power. China is generating future customers by investing on them.
China has been oppressing by the west for its political difference. By investing overseas, China acquires diplomatic partners at the same time. This allows China to gain more influence in UN.
Since China gained seat in UN, China has been developing diplomatic partners. Investing on countries helped China to develop diplomatic partners fast and efficient, which has great impact in international trade development.
Unfortunately, when China expands its influence globally for trade opportunities, it was described as “China expansion threat”, “Colonialism” etc. by some who try to bad mouthing China.
Few western provinces are facing geographical difficulties, such as drought and desert zone. These areas require heavy investment on water supply projects.
China has been investing in several gigantic projects to help improving western China, turning them to be livable lands. These projects are long term projects without initial benefits for decades. These projects require massive funding. Internal demand is not sufficient to support these gigantic ones.
Thus, China requires greater international market, and earn more from new markets. By investing in other countries helping their economic growth is beneficial to development of China.
-Oasis Desert Project
Oasis Desert Project is a national desert public welfare management project, which is highly supported and recognized by the Academy of Agricultural Sciences, the Academy of Forestry, the Ministry of Science and Technology, the Ministry of Agriculture, the Ministry of Forestry, the Development and Reform Commission, and the Environmental Protection Administration.
The project sponsor, Balinyou Banner, Enze Agriculture and Forestry Technology Co., Ltd. has reached a high degree of strategic cooperation with the China Greening Foundation, the experimental demonstration base for desertification control, the national laboratory for desertification control, and the international laboratory for desertification control.
The demonstration base leads the agglomeration role, and actively promotes cooperation and exchanges with well-known domestic and foreign scientific research institutes such as Northeast Forestry University, Beijing Forestry University, Institute of Agricultural Sciences, Chinese Academy of Sciences.
A series of desert public welfare practice activities are designed to call for more public participation in China’s ecological and environmental protection public welfare undertakings, and contribute to China’s ecological civilization construction and sustainable development strategy
The South-to-North Water Diversion Project is a major strategic project that sends part of the abundant water resources of the Yangtze River Basin in China to North China and Northwest China, thereby changing the floods in the south and north of China and the severe shortage of water resources in the north.
Coordinated development of economy, society and population, resources and environment in North and South China. The South-to-North Water Diversion Project includes three water transfer lines on the east, middle and west, with a total investment of 500 billion yuan.
The scale and difficulty of this project exceed the Three Gorges Project, and the project has been fully launched. The leading agency is the South-to-North Water Transfer Project Construction Committee of the State Council, and its office is located in the South-North Water Transfer Planning and Design Management Bureau of the Ministry of Water Resources. The core project was officially opened to water on December 12, 2014.
Some benefits of these projects might not be instant. Pouring excessive funds won’t speed up the progress. However, these areas are not ignored by Chinese government as seen.