Passport Control Requirement if transiting 2 airports in China?

1. You need to clear your passport control before you going out. Notably, there are two channels for self-service customs clearance beside immigration counters, which can identify e-passport quickly.
2. If you take flight to Shanghai, it could be a domestic to domestic transfer.
3. The hourly "rest lounges" are available to have some rest, take showers and so on, which are located at West side of Domestic Departure Area and East side of International Departure Area on the second floor.

Thanks, Steve. I'm wondering if we want to stay inside the airport in KM if we have to do passport control to "enter China" for the flight to Shanghai...we are simply transiting via China and don't need to leave the airport. Again, we are flying Mandalay, KM, Shanghai, San Fran.
Thanks for the other information!

According your situation, it could be an international to domestic transfer at KM airport. You still need to do the passport control when you transfer to your next flight.