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This is the same feeling that many cultures felt when they were overwhelmed and destroyed by a 'superior' culture. A sense that the other had sold themselves to the devil, gaining knowledge and power at the cost of sacredness.

The urban/rural split has a similar dynamic. The urban life with its casual sex, bullshit jobs, etc.. feels depraved compared to the honesty and directness of urban life.

The biggest difference for China is that sense of terror is coupled with a massive population, ratcheting it up to Borg like fear.

Instead of 10 peasants vs 1 terminator odds it's like 1 peasant vs 10 terminators. Like an alien invasion the knee-jerk reaction is 'burn it with fire'. (Knee jerk reactions always forget the consequences of hostility.) (Funny that 'alien' can legally also refer to immigrants)

In many machiavellian tomes of advice you never want to outshine the master. You can have better character, better luck, better looks, etc.. but the cardinal sin is to showcase that you have greater intelligence.

Even though the Chinese in the U.S. (across the world?) tend to have higher economic status, lower crime rate, etc... it doens't matter what they do, they are always somewhat in their own 'world' and viewed as an outsider. Often literally within Chinatowns.

This isn't exclusion though, culturally looking inward is the norm. If all your friends are on facebook but your chinese colleagues only uses WeChat it's a bit hard to merge those worlds.

An interesting fact to remind you of this is that within the dating scene most Chinese only date people they know growing up or friends of friends. Meeting 'strangers' through apps or bars feels very weird.