Great idea ! I've already been backpacking in China once, would love to go back but need a job first!
I would definitely recommend going to Yunnan Province in the southwest. Towns like LiJiang are incredible. If you go further towards the Himalaya's than that you will probably see the most spectacular mountains of your life. Not to mention the fact that the people are super friendly because foreign tourists are a rarity there.
RE: Anyone wants to go backpacking in the Chinese region?