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.
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.