Some China watchers suggest that when China’s economy is going south to the sour, Chinese government would flame the nationalism to shift the blame outward. Personally, I think it’s wrong to think like that! I think China is a one-party system government with a lot of policies that are in place to prevent color revolution or any sort of revolution from happening, and so China doesn’t need to point outward to shift the blame of bad economy at home.
Furthermore, China had been there when the former revolutionary leader Mao Zedong, founder of today’s China and the Chinese Communist Party, prescribed the wrong policy “Great Leap Forward” in which famine raped the country to the point of almost no return. Yet Chinese didn’t demand the Communist party to step down. Of course, there was the Tiananmen Square revolution, but that didn’t really destroy the Communist Party even though at the time China was still super poor.
Today, China is prosperous and strong, and so I doubt there would be a revolution even if the Chinese economy takes a huge hit to the chin. I think the Chinese government knows this, and so they probably would not take any action to flame the nationalism unnecessarily as such a flame would be easy to stoke but very hard to put down.
Nonetheless, I think the Chinese government may want to economically restrain potential rivals and enemies from conducting businesses inside China, thus the bad foreigner’s case could come up from time to time to create difficulties for the non-Chinese companies. I think that is as much as the Chinese government may want to stoke the flame of nationalism.
So, when the outsiders think of utilizing strategies that depend on the outlook of how China would behave nationalistic when the economy goes south could produce little to no effect. Perhaps, this may irritate the Chinese government enough in which the Chinese government may put up countermeasures that may have undesirable effects in diplomatic and economic relations. For an example, China may want to make it a lot harder for non-governmental organizations that support or belong to a foreign entity from operating within China.