National pride and the fear of outsiders are common traits of authoritarian regimes. Populations tend to be less educated in these regimes, countless studies have proven that as populations gain access to better education, the least xenophobic and racist they become. It is no surprise that the surge of nationalism in Europe comes along with the "dumbification" of the education system result of the "no child left behind" mindset and more than that a tool to create better consumers, highly educated people tend to consume smart and less, companies want dumb people to buy all their shit. Economic prospects also play a lot on peoples' willingness to welcome outsiders into their society, it is easier to accept immigrants when unemployment rates are low and the social elevator working well, nobody want foreigners to take jobs that could have gone to fellow countrymen.

Back to China, the funny fact is, from 1980 and onward the Communist Party has based its legitimacy on economic growth, it actually abandoned any form of nationalism in the 1980s until the tragic events that happened during the 35th of May 1989. China was an incredibly liberal society during the 1980s, both politically and economically speaking, it went backward following the Tiananmen square protests (that were in fact nationwide protests in hundreds of cities, and later on riots), the regime never forgot and still fears its people more than anything else.

Jiang and Hu played the card of nationalism in a subtle manner, they did not spread xenophobia and followed Deng's principles of "hiding your strength" and better foreign relations. It is Xi who, belonging to the elitist faction whose members are offspring of communist revolutionaries born with a golden spoon in their mouth, increased national pride to compensate the slows in GDP growth and hold onto his power.

The elitists are conservative, they often think that it was better back then under Mao when the CCP had total control, the populists are more progressive, they are the ones who pushed for the economic reforms and more civil rights.

Coming back to xenophobia and racism, in Europe and most of the West it took a lot of education and a bit of self-shaming (for White people) to create the multiracial societies that we know today. Will China do the same? No, definitely no.