and the US could just replace them with Indians. But the propaganda value would be great and would extend far beyond Chinese as trust of the US among nonwhites increases.

I don't think allowing dual citizenship is a good thing. Most second-generation ABCs can't speak Chinese and know nothing about Chinese culture, society or history. They're also very brainwashed and self-loathing racists. Even if they are not spies or saboteurs, they stick out even more than white Americans do in China. I would only extend Chinese citizenship to those who emigrated from China, not to their US-born children.