You need to review the law of conservation of energy in secondary school physics, and then understand the geography of China.
The combined efficiency of PSH is about 0.65-0.75, and this assumes that the losses in the conversion of potential and kinetic energy of the water are small enough, and that the terrain changes from the east to the west are mostly very slow, without the altitude differences over short distances that are commonly needed for PSH.
And what is the sense of building a large number of PSH on such a slow terrain? Is it to transport water to the west? Then why is your water flowing back to the east at night?
Is it to generate electricity? The overall energy distribution in China, whether thermal or hydropower, is that a lot of power is delivered from the west to the east. Why use a lot of electricity to pump water up and then generate electricity at a maximum efficiency of no more than 0.75 to places that don't need that much electricity?
I can probably understand where you are coming from, not to mention that this is essentially a giant perpetual motion machine, but the system itself is contradictory in its purpose and approach.
The changes in elevation would not occur gradually, it would occur in steps. The route of course would need to be carefully selected for that to happen so that minimal land engineering is needed to achieve that and natural geography is used as much as possible. Excuse my crude drawing, but it'd be something like this:
There would be net east to west water flow due to water being progressively removed from the canal for water usage. That's one of the two main purposes of this project. In fact, I would argue this is THE main purpose of the project. I see water scarcity to be a bigger issue than energy scarcity in the future. As you can probably surmise, much of the energy will be used to desalinate water and distribute it rather than being stored as potential energy for night time use.
As for why it would be pumped west, where there's less need for electricity, the answer is for energy storage. At night the flow is west to east, meaning the desalination plants would be mostly idle since there's no place for the water to go. The UHV lines which send solar/wind generated electricity east to power desalination plants during the day would instead be sending hydropower generated electricity east to power households at night.
Being able to recover 75% of the energy input is pretty good, which is why pumped hydro storage is one of the most commonly used energy storage solutions. A relatively small area of solar panels placed in the Gobi desert is enough to power the entire world, this project thus imagines a future where the quantity of renewable energy generated is not a major issue, but the time distribution of it is a more significant problem.