I always imagined China was pretty diverse, ethnic-wise. With the northern mountain people, the coastal people the western people (I don’t know names or terms) being quite different from one another

You’re correct, but think of it in the sense of ‘Caucasians’. You can break them down into subgroups that largely correlate to specific geographical regions, but as a group they’re still pretty distinct and recognisable. Of course, things like this tend to get fuzzy around the edges, but that’s biology for you.