Satellite precipitation products can help improve precipitation estimates where ground-based observations are lacking; however, their relative accuracy and applicability in data-scarce areas remain unclear. Here, we evaluated the accuracy of different satellite precipitation datasets for the Lancang River Basin, Western China, including the Tropical Rainfall Measuring Mission (TRMM) 3B42RT, the Global Precipitation Measurement Integrated Multi-satellitE Retrievals (GPM IMERG), and Fengyun 2G (FY-2G) datasets. The results showed that GPM IMERG and FY-2G are superior to TRMM 3B42RT for meeting local research needs. A subsequent bias correction on these two datasets significantly increased the correlation coefficient and probability of detection of the products and reduced error indices such as the root mean square error and mean absolute error. To further improve data quality, we proposed a novel correction–fusion method based on window sliding data correction and Bayesian data fusion. Specifically, the corrected FY-2G dataset was merged with GPM IMERG Early, Late, and Final Runs. The resulting FY-Early, FY-Late, and FY-Final fusion datasets showed high correlation coefficients, strong detection performances, and few observation errors, thereby effectively extending local precipitation data sources. The results of this study provide a scientific basis for the rational use of satellite precipitation products in data-scarce areas, as well as reliable data support for precipitation forecasting and water resource management in the Lancang River Basin.