I would say the one of the primary reasons China occupied Tibet in the first place was to display to the World the superiority of the newly created communist regime that had come into power. One has to remember that China broke all prior treaties which had been created between the rulers of Tibet and those of China after the communists defeated the nationalists and won the civil war that had started in China, in 1950.
The reasons for the continuation of Chinese occupation include the discovery of large deposits of natural resources in Tibet which include copper, lead, zinc, etc.
The glaciers in Tibet also form a large resource of water which is essential for China and also acts as a leverage against India, the largest rival of China. Some of India's most important rivers originate in the glaciers of Tibet.
There are a number of reasons for China's desire to occupy Tibet. I would argue that the most important of these are the following:
- China's prestige and its control over its minority populations. China believes that Tibet is an integral part of its territory because Tibet was part of the Chinese empire at many times in history. Therefore, Tibet is like Taiwan to China. They feel that if Tibet shows signs of independence that might encourage Taiwan (as well as other regions of China that have minorities) to want more independence. This would (China feels) lessen China's prestige and its cohesiveness as a country.
- Tibet's location. Tibet is on trade routes between China and Central Asia. It is also near to India, which China sees as a potential threat. Therefore, China wants to control Tibet.
- Resources. Tibet has many resources that China needs and China does not wish to have those resources in the hands of an independent country.