If you have white skin in China, you are a target. There is no way to blend in. The vast majority of Chinese do not approach foreigners, though they will stare and call for their kids to come look at the "lao wai" (old foreigner) as you walk down the street. White people in China get stared at as they go shopping, eat in restaurants, or use public bathrooms. A few people will say "hello" to you to try and get your attention (especially street vendors), but this is usually all the English they know, or remember.
Most Chinese people will not try to interact with foreigners, though they may form a crowd that follows the foreigner from place to place and stands just a few feet away. There are two types of people who actually approach foreigners: those who want to practice their English and those who are Christian.
I have found the number of people who want to practice their English is surprisingly large. These are usually students who are studying in school, from the Voice of America, or Chinese TV. They want to practice the English that they know which is anything from a few stock phrases (these conversations usually start with "Hello, I want to be your friend") to semi-fluency (especially University students). It is rare for people who are fluent in English, such as tour guides or English teachers, to approach foreigners.
You will be a target for Chinese Christians who expect you to be Christian, as well. How you handle this is your own business. For the number of missionaries in China and their sometimes intense involvement in Chinese churches, it is extremely rare for a foreigner to be harassed by Chinese authorities, though it does happen. However, Chinese people who associate with foreigners in religious settings are probably harassed a great deal. I, personally, think westerners should keep their religious views to themselves because their ideas of religion are western and because they may be endangering the very people they are attempting to help.
Foreigners are also a target because they are expected to have a lot of cash. You can really get overcharged with the bargaining system in China. Street vendors will often triple of quadruple the price they expect to get from a Chinese customer. (I have heard of up to 10 times the Chinese price, but this is mostly in touristy areas). Taxi drivers will try to charge you more than the meter reads (or would have read, they'll often turn the meter off). Even when you are buying something from a vendor giving you a fair price there will be a people around telling the vendor to ask for more money.
People with white skin are a target for people who dislike foreigners. China was closed for a long time and many people still distrust and fear foreigners. With white skin, you become a target for heckling or loud insults, especially in more residential or rural areas and especially if you are alone or only with other white people. While this can be frustrating and disheartening, I have not heard of anyone who was actually threatened or endangered.
The second largest group of foreigners in China is Japanese people. Japanese people, while they have an easier time blending in, get much worse treatment when they are discovered. Chinese people justify this treatment with memories of the Japanese invasion of China. While white people receive a variety of responses, Japanese people only receive negative ones.
White people who visit China should be prepared to be an exhibit. Whatever they do, if they smile and laugh or scowl and look away, they are still an exhibit. Even going out with Chinese people or managing to keep moving all the time is not foolproof protection from staring and comments. White skin is a difference that is impossible to hide.