A Taiwan newspaper called the Want China Times ran an article on December 2, 2013 to the effect that officials in the Chinese Peoples’ Liberation Army would like to make the moon a military base. The article speaks of China desiring to turn the moon into a “Death Star” from which ballistic missiles could be lobbed at Earth.
The Want China Times is owned by the Want Want Group, a Taiwanese conglomerate in turned owned by Tsai Eng Meng, a billionaire who favors closer economic and political ties between China and Taiwan. China regards Taiwan as a rebel province which it would like to one day regain control of. Taiwan has been a separate country since the Communist takeover of China in the late 1940s.
The article’s description of a Chinese military base on the moon sounds remarkably like an American plan hatched in the 1950s called “Project Horizon.” The plan was abandoned because of the great expense and the fact that missiles launched from the moon would take days to reach targets on Earth.
In any case the Outer Space Treaty of 1967 prohibits the construction of military bases on the moon. China would have to withdraw from that treaty should it choose to do what the Want China Times suggests some elements in the PLA want.
Even if the idea of bombarding the Earth with moon based missiles, the moon does contain a great deal of resources, such as water ice, that could be useful for China to seize and control. Water can be used to make rocket fuel, making the moon an idea refueling stop for space craft headed deeper into the solar system. China would have to weigh this advantage to the probable reaction of the United States and other countries.