It is not so simple - everything you said is true - but the Chinese are not all “ethnic” Chinese and Chinese from that part of the world are not exactly the patriotic kind. China is not a homogenous country. China has also rarely moved outside of its ‘realm’. They built a wall for a reason and that wall is also mental. The Chinese prefer to expand their empire via influence. They want nations to come to them and kow tow rather than go out and rule land directly outside of its Chinese heartland.
The locals have been crossing the boarder to scout their land. This has been the policy of China for some time.
Tell that to the Tibetans.
My experience (living in China for 6 years, working here part-time for 12 years, and marrying a Shanghai lady) is that the Chinese have strong differences amongst themselves - but see themselves as ALL Chinese before anyone else.
If there aren’t any foreigners around, then they’ll squabble and call each other farmers and rice buckets, but when there is a foreigner in the mix - it’s a solid, united front of Chinese.