It's definetly not a citizenship, nor based on race.
It's more like a Chinese Green Card (PR) for Overseas Chinese (Chinese Citizens Descendants no matter from what race) in unstable country, like Myanmar for this example.
And I think it will not cause alarm or wrong message to other countries.
Because many Indonesian citizens also have Green card in Australia, US, Canada without having problem with their Indonesian citizenship. This ECC more or less like that.
China itself today have what it's called an Ethnic Visa Program. So as long as you can proof one of your ancestor are Chinese Citizens, you can easily get 5 year multiple entry Visa
https://www.thejakartapost.com/trav...r-visas-to-foreigners-of-chinese-descent.html
https://www.globaltimes.cn/content/1088793.shtml
Commentators have suggested that implementation of the ECC would equate to China’s acceptance of dual nationalities.
That would not be the case.
Chinese citizens not only enjoy social and economic rights, but also political ones, such as the right to vote, to stand for election and to serve as a civil servant. Neither ECC holders nor permanent residents could enjoy political rights in China. They would not be able to participate in the NPC (National People’s Congress) election or serve as members of the CPPCC (Chinese People’s Political Consultative Congress). In addition, they would not be able to serve in state organs or hold certain positions in state-owned enterprises. So the ECC only entitles its holders to specific advantages within the Nationality Law for Chinese foreign nationals whose skill sets are under demand. It would not equate to the acquisition of Chinese nationality. Not all Chinese foreign nationals would be able to get the card, although it would be easier to obtain than the Chinese green card. There are certain requirements to obtain a green card. For example, the applicant must have a talent in a specific field, have special skills necessary for developing the economy and society, or be willing to make large investments in China