Of course there are still the clusters of expats in most cities and they are growing. Some cities may only have a cluster of 2!!, like a city north of Beijing where I have been working since I arrived in China...but numbers and the spread of ex-pats is widening as opportunties present themselves and the laws and reg's are found to be workable for the outsiders.
Ehtnic minorities are numbered at about 56 I believe.
The thing that really gets my attention, is that no matter what other beliefs the Chinese may have (for example my Mandarin teacher is a Muslim from North Eastern China) their first and only true allegiance lies with China. They are, by far and away, the most staunchly proud nation people I have come across in my travels of Asia.
And you are definately correct when you talk about being ex-communicated if you are being seen not to tow the line.
