Being Chinese in China has almost nothing to do with the government. It's a cultural belief that's persisted for centuries. Don't expect that to change at "at the drop of a hat".
It's not a particularly unusual belief, really. All cultures have an in-group/out-group division. OP is just missing traits this specific test requires.
You can't be Chinese right now, but that doesn't mean you'll never be Chinese.
Governments do fall and rise at the drop of a hat in China. People know that right?