Ah, racially marked symbols.
We know the Old Chinaman is a symbol because everyone in the book is busy trying to figure out what he means. Is he God? Is he Death? Is he just "a funny old chinaman" (4.2)? Like any good writer, Steinbeck never says straight out what's going on with this dude, so let's take a look at his big scene.
We meet the old chinaman in Chapter 4. He comes out at "the hour of the pearl" (14.1), to go either to the beach or come back from it. (This sounds a lot like the setup for a koan to us.)
He never stops in Cannery Row and nobody knows anything about where he is when he's not passing through town. But they can hear him coming:
He wore an ancient flat straw hat, blue jeans, both coat and trousers, and heavy shoes of which one sole was loose so that it slapped the ground when he walked. [ . . . ] People, sleeping, heard his flapping shoe go by and they awakened for a moment. It had been happening for years but no one ever got used to him (4.1)
If we had to guess, we'd say he looks a little like these guys, some of the many, many Chinese men who worked on the railroads in the 1860s. Notice they're wearing "flat straw hats" and what looks like denim. Before skinny jeans were invented, by the way, jeans were work clothes. (Now we challenge you to do anything in jeans. You can't even sit down in some of them.)
So we're guessing that this old Chinaman might have been a laborer who worked on the railroads. But that doesn't seem to occur to anyone on Cannery Row: they're just creeped out. Even the kids don't bother him, because "he carried a little cloud of fear around him" (4.2). Only one kid (someone visiting Cannery Row, not a local) tries to mess with him. And boy does he get it:
The old man stopped and turned. Andy stopped. The deep-brown eyes looked at Andy and the thin corded lips moved. [. . . ] The eyes spread out until there was no Chinaman. And then it was one eye—one huge brown eye as big as a church door. And looked through the shiny transparent brown door and through it he saw a lonely countryside, flat for miles but ending against a row of fantastic mountains shaped like cows' and dogs' heads and tents and mushrooms. (4.4)
Whoa. Okay, let's continue:
There was low coarse grass on the plain and here and there a little mound. And a small animal like a woodchuck sat on each mound. And the loneliness—the desolate cold aloneness of the landscape made Andy whimper because there wasn't anybody at all in the world and he was left (4.4)
And again, whoa. Heavy stuff. So in the Chinaman's eyes we have a really, really bleak landscape with these kind of psychedelic mountains. Where is it? China? The American West? Both? What really scares the kid most isn't that the mountains have animal heads (though, um, that's pretty scary), it's the "desolate cold aloneness" he senses.
In Cannery Row, being alone is the absolute worst. And you can see why: in a place like Cannery Row, you really have to depend on your neighbors. So in that way it makes sense that the very, very alone Chinaman gives everyone the heebie-jeebies.
Because he's dressed as a laborer, the old chinaman also a reminder that the railroads in the West were built with the help of lots and lots of Chinese laborers who had to endure discrimination, bad working conditions, low pay, you name it. So there's an element of guilt here, too, like he helped build railroads we all really needed, but we refused to let him be a part of the county he was helping to build.
And finally? The Chinaman is far from home. He's an exile and a stranger here in the States. Even the kids are scared of him. No wonder his eyes are full of loneliness.