I've answered a bunch of this in one of the way older episodes but there's a few culprits for its perpetuation, primarily political.

As touched lightly upon here, it was seen as hocus pocus nonsense by scholars literally thousands of years ago and banned for use, it was only when Mao Zedong came into power that it started to return because he had a huge population and not enough real doctors to treat them. To shut them up he told the country to turn to this ancient stuff - which he is quoted as not even believing it himself.

With the cultural revolution in play he didn't want any smart-arse getting in the way and questioning him, so books and and people with brains were burned and kidnapped (in whichever order) until nobody questioned it.

Now it simply perpetuates from a lack of proper education as the scientific community in China are determined, for political reasons, to replace western influence with home-grown influence, and to generally out-number publications from the west regardless of quality, honesty and reproducibility for the sake of national pride. So with the backing of millions of 'scientific' papers, who can doubt it anymore?

As a result, it's spreading internationally and the white middle class of the west are increasingly embracing it as an 'exotic' and 'natural' form of medicine which is, of course, much better than the corrupt poisons being produced by 'big pharma'.

What a fun time we live in, eh?

EDIT: I should also point out that we're still living in a time where villages are hours and hours away from any notable doctors at all, perhaps days, and so we still get rural folk conjuring up random home remedies, including Poo tea and Urine