The initial Lorebeards podcast that interviewed Andy Hall. It's not in the Cathay army book proper, but the people who wrote the book say that the distaste that the dragons of Cathay have for the High Elves filters down among the people of Cathay.
Boney has already mentioned that disdain for foreigners is not exactly a rational thing. But why would Cathayan peasants be terrified of wizards? The Celestial Dragon Emperor is a wizard. As is all of his children, and so are all of their children. Magic would be normal to them. The dragons of Cathay would not build a society with magic-terrified menials, given all the magic that they use.
This is not what I said. The Dragons and their children are an Us. The Asur, Indish, Hung, and Empire are all Thems. I did not bring up their opinion of Ulthuan as evidence of what they would think about foreign magic users. I brought it up because Ulthuan is much closer to being a peer of Cathay than the Empire and they still look down on it. The vast majority of Cathayans aren't going to think about the barbarians, and the vast majority of those that do aren't going to be envious of them. Why would they be? They're barbarians.