This is an interesting question. I generally don't recommend people come to China any more unless they have a strong interest in history. It is more enjoyable for first-time visitors to Asia to go to Japan, Thailand or Singapore and let's face it, China is feeling more and more like a police state. Not ideal for an enjoyable, relaxing vacation.
JPDM- Friday I had about a 15-20 minute delay entering Xujiahui Station Subway (a major station in Shanghai for those who may not know). They were scanning everyone's ID cards or passports on temporary (and too few) inspection stations. This was done before you got to the luggage screeners. It used to be rare, but I seem to run into it somewhere every month now. It's not just the time but the manner in which everything was done, security in train stations is a model of courtesy in comparison. The entire time I was there a French lady was trying to explain that her passport was at a consulate for a visa application. I never saw her get in, hopefully she made it. She did say to me she may give up and just go find a taxi.
I have seen this and frankly much worse in Xinjiang but I did not expect it in Shanghai. Fortunately it is not often, but if you compare this to going to Thailand.... So I consider who is asking before making a recommendation to visit China or not. Also perceptions lag, I get far more questions about the pollution (which has seen noticeable improvement) than the tighter public security. People are not aware of it yet so I don't think it is a major factor.
Overall I think many Europeans and North Americans who had interested to see China have already done so and once was enough. Plus, China is not as unknown and exotic as it used to be. I think this is the major factor in the small decline of visitors from Europe and NA.