I would do all the possible research I can. But I really don't want too many political historical issues happening here and since it would have some dystopian themes set in the future. I understand and have knowledge of the conflicts that happened between China and Japan and about all the atrocities that the Japanese have taken part in doing to the Chinese during WWII and even the conflicts that occurred before that in history. even if this is set in a dystopian/future I might lean away from having both corporate countries integrated and just pick maybe only Chinese.As someone who is ethnic Chinese here is my 2 cents:
Write it. But do your research - really make sure you know the historical background and context. China and Japan have a very long history of animosity and feuding. For example: read about the Rape of Nanking and Japan's actions around the Pacific Rim during World War II to learn exactly why there is so much animosity and why a child who is both Chinese and Japanese would be in a difficult position because of their ethnic mix. My grandmother will always treat Japanese people with suspicion because of the terror and carnage they inflicted on the Chinese population across China, the Mekong Delta, and Southeast Asia during World War II.
This I also thought of doing, making them fictional ethnicities like the demon side being not a real race, but it might cause too much disbelief.Look at how R.F. Kuang handled the whole Chinese vs Japanese thing in her book THE POPPY WAR - she's a historian specialising in that area and even she fictionalised the ethnicities (though it is clear who is who).
I want to avoid stereotypes as much as possible if any at all! Meaning avoid them completely. Let's say if i make this an Chinese family who started out as like a secretive peaceful warrior organization (like the Wakanda version of Black Panther) and one of them in the group becomes corrupted, turning it into an assassin-like organization that still remained hidden but the new corrupted leader wants to expose it for more power and enters a super corrupt international tournament run by corrupted sponsors in the US. The Chinese guy wins becoming the champion winner and claiming right to take over the company tournament as now the new tournament sponsor. But since this guy is corrupted and carries the demon traits passed down his family line since ancient times has turned it into a more powerful organization, carrying over his old style organization that was assassin-like making it more powerful than before. And the next big tournament this Chinese guys son who is the MC would enter this tournament also carrying the demon traits and be the one to face his dad in combat and probably the only one strong enough to defeat his father.Then write out your story - and make sure you treat all characters like people instead of falling back on stereotypes.
Once you've written a draft that you are ready to have others beta read, make sure you get sensitivity readers well-versed in Chinese and Japanese cultures to go through it. Run it by friends who have Chinese and Japanese heritage - they may be able to spot some negative stereotypes that you may not be aware of if you aren't Chinese or Japanese. Because if you are not Chinese or Japanese, you are going to have blindspots.
And contrary to what K2 says, I'm going to point this out:
There are no "vast swaths of people who will 'make it a point' to be offended". If people from the ethnic groups you include in your story point out to you certain things that misrepresent their cultures - listen, please. They are making the effort to do this because it's bloody irritating when authors and other creators (especially if they are White) just use our cultures as a widget to make their stories "different" or "exotic". If they are making the effort, then take it in good faith. It doesn't hurt to listen and take notes. It might even help improve your portrayal of various characters etc.
Nobody is saying you can't set your stories in our cultural worlds and settings, but most people who object to a particular element or portrayal in your story are saying: "Do it with respect and care, please."
I would have the son (MC) just Chinese or mixed Chinese with a quarter of American or British. Because I know that there are British that have lived in parts of China before, His mother could of inherited Chinese/British descent.
Please let me know if any of this sounds stereotypical or racist. Since you are ethnic Chinese. I would really love your opinion on this basic concept of mine.