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This is to combat money laundering and tax fraud. I'll give three examples.
I saw an episode of Border Security Australia where a woman has previously claimed a VAT refund on a pair of earrings worth tens of thousands of dollars. As you may know, many countries allow you to claim a refund of VAT on products intended for export, as VAT is intended to be a tax on consumption. But customs agents caught her wearing the earrings, meaning she had not actually exported them and essentially cheated the tax authority out of thousands of dollars in VAT.
Last year, during a trip to Hong Kong, my mother withdrew 20,000 USD in cash from her American bank and took it with her in person, and then deposited it in her Hong Kong bank account. It was just easier to do it this way since an international wire transfer would have been expensive and slow. She declared it to both US customs and Hong Kong customs, and in both cases they just checked her passport, noted down the transaction, and let her through with minimal questions. It's intended to be an anti-money-laundering check. If that money has been obtained through crimes, most criminals would not willingly disclose that to customs, and it's such a large amount of cash that anyone doing so must be trying to move money internationally and not just pay for a holiday. There is literally no penalty or tax and minimal hassle to declare it, so pretty much whoever is trying to sneak large amounts of cash or gold or whatever through customs is either (1) very ignorant or (2) up to no good. Further questioning usually allows customs agents to separate the first category from the second.
On the topic of China, there are strict capital controls in place to prevent wealthier Mainland Chinese individuals from moving all their money abroad. This policy is to encourage domestic spending and investment and it also has the effect of drastically lowering borrowing costs for the Chinese government. Moving large amounts of cash or gold in person is the most obvious way to evade these limits so Chinese customs has to take a strict stance against such behaviour in order to prevent China's airports from becoming a massive hole in their capital controls. Being caught with undeclared cash provides an easy excuse for customs to confiscate the money in question, where the passenger can't really argue over their guilt, since, again, anyone carrying such a large amount of cash pretty much has to know what they're doing.