It is because in the village, 20 years ago, people walk on the streets, there are no cars just the odd bike and cow-carriage. Move those people to a modern city, they keep living like they used to. 

Note: During the autumn, when entering Macau, you got a small note, one side was red, explaining in Chinese basic traffic rules, and the fines hereof, the other side, green explaining good behavior. When you walk around Macau, you can tell who is mainlanders and who is not. In Macau, cars stop for red light, pedestrians likewise.... and then there are all the zombies from the glorious PRC: 

Also. Sidewalks are often very uneven, certainly a tribute to poor workmanship, bad planing and complete lack of maintenance. 

yeah, I wondered about that too.  I walk to work everyday and I swear I am the only one who uses the sidewalk! It may not be the best sidewalk in the world, but long stretches of it are perfectly adequate.   The locals will not use it.  They walk on the small side-road beside the big main road.  The small road is covered in parked/moving cars, pedestrians, bicycles, rubbish dumps, discarded building materials.  Still, they will walk there and not the sidewalk which is about 2 metres away from where they are walking.  This behavior totally trips me out... As far as figuring out why, I must admit I cannot.  Well, let me speculate- chinese people are just like their country- developing.  

I often wear hiking boots and find the stone sidewalks are slippery when wet, so I drag my feet, my GF often asks ''WHY" and I say its slippery. Maybe Chinese find this also. I've seen scooters wipe out because they use the front brake on slippery sidewalks.

 Most of the time when I'm walking with a Chinese person I drag my feet because I can't walk that slow. If I'm out just walking around by myself, I walk a little faster but if I'm going some where I walk about twice as fast as anyone around me. I think I must look weird to them, maybe even rude, but that is how I walk. TIC

It is because the sidewalks are mainly used by those bicycles with loads of stuff being carried on them so it is better to walk on the roads and be hit by a BMW and then claim money from the driver

I almost got my throat slashed once by a bicycle laden with cardboxes

I guess do to space limitations , here in Qingdao they use the sidewalks as roads, parking lots and strip malls. I have been clipped by cars walking to my classes numerous times, the driver got away. But it seems sidewalks and pedestrian safety is not an issue yet.

I thought Chinese had beef with noodles, guess they really will eat anything

Here in Suzhou, there is plenty of space to park, ride bike, walk, etc... Yet nobody is on the right place. People on the bike lane, bike on the walkway, sometime cars on the bike lane. It drives me *MAD*. Sometime, I'm blocked by people walking on the bike lane. I tell them in Mandarin "hey, walk on the walkway, it's a bike lane. *Bike* *lane*" And... all freak'in times, I got the "ho sorry" with the face-saving-smile and they keep walking on the bike lane. Freak'in zombies. It's not a cluebat you need, it's a cluster-cluebomb, it's a cluemachinegun...

well sometimes some ebikes drive me over when i use the sidewalk :/

Here pedestrians are pretty much forced to walk on the road because drivers are using the footpath as a carpark and beeping at anyone daring to use the footpath for its intended purpose. The ridiculous part is when there is a massivly wide footpath that is near impossbile to walk along because of the cars whilst the kerb has no parked cars in it. If I have a bottle of water in my hand and a car honks at me, I just threaten to throw it through their windscreen and they usually shut up.

Because the sidewalks are used for (in order of my personal experience)

1) fabrication workshops especially security grills and drying racks and you risk getting spot welded or blinded

2) parking cars & e-bikes preferably at strange angles (I feel like I'm diagonally parked in a parallel universe?)

3) setting outdoor eating areas for food stalls

4) selling phone plans, cards etc

The side of the road is used for selling watermelons, fried oily anything and stinky tofu 

Between the middle of the road and the fruit and food stalls is the  walking  zone 

The middle of the road is occasionally used for driving and parking bikes (if you are only going to be around 5-10 minutes or longer if you get distracted)

However I have no idea where they cook and eat beef

Yeah they do it a lot and it is like Scan said, village mentality. 

My wife is from a small village (as many Chinese are) and she sometimes without thinking (as many Chinese do) walks on the road. I quickly tell her to walk on the sidewalk with me so she doesn't get hit. I have to repeat it over and over. She doesn't argue and realizes I am right but it is like I need to constantly point it out because she just doesn't think about it. 

For a country with 1.4 billion, you think they would teach safety in school or something, but they (the government) don't care... They leave it up to foreigners to teach their people while they save money on proper education sipping cocktails on their "special meeting" trips in Sanya. 

Well i think it is usually:

1, they are idiots.

2, the sidewalks  were built by idiots.

3, idiots like to park their cars on the sidewalks.

Despite of course the irrationality we are used to deal here with, I have a proper theory for this.  The Chinese Theory of the Middle. That is where every single soul in order to find their safe haven, they will move hopelessly from both sidewalks on each side of the road towards the center, where indeed is more crowed and full of energy and activity. That is clearly seen when they build these kind of street stands on the road and everybody does it accordingly towards the center until there is no more space in the road than a thin line where pedestrians are almost not able to walk through. As well you might have not noticed but they are so attracted by this middle theory that sometimes they even cross the road without looking. They cannot help it!