-To understand the mentality of a Chinese parent, you need to know a few things. First, the obvious one child policy, and the expectation that this one child will support their children but also their parents and grandparents (no social security, minuscule pensions and a non-existent safety net). This puts an enormous pressure on the individual to have a stable and high wage job. Lots of people on these boards are in startups (or would like to be), but few Chinese nationals are willing to take that route due to the immense risks involved. They're gambling not only their personal wealth but also the survival of their family.
-School is brutal, particularly college admissions. Each student at the end of high school takes something called the gaokao. Imagine the SAT on steroids (2 days long) that you only take one and almost wholly determines what "tier" of college you get admitted into. You can take it once a year, and if you fail, you have a second chance one year later (the intervening year is usually spent studying 14+ hrs a day). You pour a gazillion college-bound kids into this crucible of death, with only a scant few slots at the other end. Even for the student goes abroad to study, they've been indoctrinated with the cutthroat and "success at all costs" mentality necessary to get ahead in China. It's a numbers game, and the numbers are stacked to make your life hell.
What does this have to do with obsessive parents? Take these last two facts and mix in some historical perspective. Many of these parents either lived through or are sufficiently proximate to the turmoil of the 1960's and 1970's to know how brutal life can be for those that do not get ahead. It's not the American poverty of temp labor and living in a trailer park; it's the poverty of starving to death. It's the poverty of not having shelter from the cold, of having zero access to medical care. While this is less true of today's China, the fear of this poverty survives, even for those in relative affluence (think of your grandparents that lived through the depression and still are obsessively thrifty).
I can understand why these parents are monomaniacal in ensuring (or trying to ensure) a better life for their kids. With grueling competition, a one-child policy, scant social safety nets and a vivid memory of how brutal China can be, it makes sense.