This conclusion isn't quite there.
In China, foreigners are notionally required to carry their passport with them. I have never actually obeyed that, because it is a very bad idea. And it's never mattered, because although I'm obligated to produce it on demand, that demand has never been made.
It's not because I blend in. Any idiot can see that I'm not Chinese. "Looking like an immigrant" is not sufficient to be stopped by the police.