You absolutely did the right thing by keeping quiet. If you don’t speak Chinese (or any local language) it is so easy to be taken advantage of. There is no guarantee, but what if you grabbed the guy and wrestled with him, trying to get the wallet off him when suddenly the thief yells to the crowd “Help! This foreigner is stealing someone’s wallet and is trying to kill me!” Then a cop shows up who doesn’t like foreigners and it could be all over. The culture in China is different, very possible that someone could have seen that you are innocent but stayed quiet, avoid the trouble plus who knows, maybe he really did steal that wallet. I’ll go home to my family and the courts can decide if he’s guilty. Like things probably wouldn’t play out that way, Chinese (and Taiwanese, Cantonese) people are incredibly decent and well to do but the perfect storm of a misunderstanding could easily turn on you.