An interesting tangent on this issue is how in the US Asians of my generation and younger follow an Asian identity and identify with other Asians be they Chinese, Korean, Japanese, Vietnamese, Hmong or Philipino while the same doesn't hold true in Asia. In a way being somewhat removed from our original countries and cultures has allowed us to recognize that as Asians we have more in common than what sets us apart.
My apologies then. You'll see this stuff in almost every country, which is why I didn't think this is that surprising to you. Anyways, liberalizing traditions and governance would help multiculturalism as much as introducing more minorities. Inherent in nationalization is retaining cultures and norms to form that border and group identity. In Asia, there's a larger hive mind mentality than the West. I'm not defending its racism, rather pointing out how its governments and cultures seem to be working at the same ends....
realize how in america every says "oh i am (insert nationality)", but in their native country or any other country they would say "oh i am american"