Kunming is a big city, with alot of expats, but also alot of tourists.

Tourists, can be fun to chat with, but many are just looking for a unpaid travel guide/agent. But they are usually good for beers.

Ex-pats on the other hand fall into 3 groups the good, the bad and the ugly.

The ugly, usually found in the expat bars all times of the day and night. Never have any cash and impossible to pin down exactly what they do for a living, usually "consulting" or something as dubious. They are easy to be your friend.
The bad- Mainly medium/long term ESL teachers, that have adopted the narcasstic, backstabing, lying and cheating survival tools of the indiginous population. Reasons, they dont want you coming to their school and looking better than them, so they will just feed you lies or your employer lies.
The good- Fresh off the boat ESL teachers, professionals in other fields than ESL or consulting. Long term settled residents not living in fear year to year.
How can you figure out by seeing someone on the street as to which group they belong to, well a a huge backpack may be a giveaway for the first. But as to Expats it gets more difficult.
So I gave up nodding to others on the street, why...well I dont know them, probably never will, its meaningless.
You dont nod to every everyone you see back home, my chinese wife didn't nod to every Asian she saw on the streets in the years we lived in the USA.

I guess we tend to keep our greetings to people we know regardless of ethnicity, but thats just us.

Very informative, thanks for posting.