I was pretty sure China would be the example that would show up. Not a great example to emulate.

The term state in that context means country, which is why citizen is a synonym for national. in the Oxford English Dictionary, that is the first definition, and secondarily (and more historically than anything) it refers to citizens of a town. It might be in use locally, but I have never heard anyone use the term citizen in that way other than poetically, and I have spent time in a number of English speaking regions.