You are absolutely correct. If you child does not check the "Asian" box on the application, admission officials might suspect that you are trying to "game" the system. As in most things in life, honesty is the best policy here.
Moreover, despite what you read or hear about a glut of outstanding Chinese candidates at top colleges, if your son or daughter has especially strong ties to your Chinese roots, this may even be an advantage in the admission process. For instance, if your child has some expertise on a little-known aspect of Chinese history or culture or, perhaps, participates in an unusual Chinese tradition, this may be good fodder for an atypical essay. It might show admission officials that he or she will bring "diversity" to campus. Even if the applicant pool is already rife with other Chinese hopefuls, this can make YOUR child stand out in the crowd.
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