That's completely untrue.... Sure, the Chinese have over a billion people, but they're not all gamers. Gaming is something only a small minority do. And it's not like every single one that does game is going to jump up and play FFXIV. At most, maybe 250,000-500,000 Chinese players are going to pick up, which would balance out to about 25% of the player base tops. China is not this big scary monster that's going to over run FFXIV.

I know there are tensions between Chinese and Japanese. The grad school I go to has a huge Chinese population (10% of the total student body). If you wear a shirt with Japanese characters on it, you will occasionally get some harsh looks. But overall my experience is my Chinese friends are pretty accepting of my Japanese friends. It could be because we're a little older than the average student though.

But considering this is a Japanese game, and the old jokes of GMs favoring Japanese players in XI, it's super unlikely that Chinese players, were they on the same servers, would last very long acting aggressively towards Japanese players.