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Here's the wiki article on the law: https://en.wikipedia.org/wiki/Law_on_Promoting_Ethnic_Unity_and_Progress.
Some stuff makes sense - like economic modernization of regions with many minorities (especially poor regions), teaching Mandarin in schools so that everyone can speak the majority language, and preserving cultural works and texts of minority groups.
Other stuff seems repressive, like the broad enforcement section, the extremely broad reach of the law into all public and private institutions, legislating what various actors can/can't teach the youth if it might "harm Chinese ethnic unity" which is left pretty vague. Very ethnostate-coded stuff on the whole, not great.
Some sections I thought were noteworthy, taken from wikipedia, shortened with DeepSeek. There is lots more stuff in there.
It's quite standard fascist discourse:
Point to real problem that everybody wants to solve; declare that some policy they want (almost always some kind of racism) is the only solution; do some genocide as the means of implementing the policy.
Define how exact this is a racist policy, please. Be precise.
The reason this law is written this way is because of the US funded and armed East Turkestan movement that has killed hundreds of men women and children and dozens of police over the last 30 years.
That is the 'ethnic policy' that no, East Turkestan, a "country" invented in the 1990s by white people that were upset their spy networks in China kept getting executed, is not real and is not a part of Chinese history or culture. Because the East Turkestan movement used propaganda that said the evil Chinese Communists invaded East Turkestan (literally several millennia before communism came to China) randomly and out of the blue and stole away the people of turkey and their land (that just has happened to have been on every single western map of China ever made).
The "ethnicity" is Chinese. All people in China, Tibet, Xinjiang, Inner Mongolia, Yue, etc are Chinese. There are sub ethnicities like Uyghur, but they are Chinese.
This law is to reduce racism and radicalism.
I am definitely sympathetic to the defense against foreign dissent-manufacturing. I don't doubt that is a serious issue.
But, ethnicity and nationality are separate things. Being a Chinese citizen does not make one ethnically Chinese - or in this case Han Chinese. I think what you are calling "sub-ethnicity" here is just what people mean by "ethnicity". And what you're implying is "ethnicity" is just "nationality".
Though I think the CCP is trying to establish the concept of a Zhonghua Minzu (中华民族) or "Chinese Nation/Ethnic Group" - which is an artificial category intended to create a unified Chinese national identity out of the 56 ethnic groups recognized in China - maybe that's what you mean? Either way, that doesn't fit the typical anthropological definition, in my opinion.
I think they walk a fine line with that concept - it'd be very easy for that national identity to represent the Han majority more than the small minorities. As evidenced by the language restrictions posed by the law. Given the Han majority is 90% of the country, I don't see how it could be otherwise.
To the extent that it reduces racism and foreign-sponsored dissent groups, that is good. To the extent that it limits free practice of culture and true, non-US-State-Dept sponsored, free speech, I'd say it's overly draconian. But, I can also appreciate the need for more "authoritarian" laws in a country that has been under attack by foreign powers for as long as China has.
I am not a Chinese legal expert and have not read the full law, nor do I fully understand the context. So I withhold full judgment and don't value my opinion too highly.