Let me start with a longer quote:
Now, among our most obscure institutions one can certainly include the empire itself. Of course, in Peking, right in the court, there is some clarity about it, although even this is more apparent than real. And the teachers of constitutional law and history in the schools of higher learning give out that they are precisely informed about these things and that they are able to pass this knowledge on to their students.
[ ... ]
But, in my view, it’s precisely the empire we should be asking the people about, because in them the empire has its final support. It’s true that in this matter I can speak once again only about my own homeland. Other than the agricultural deities and the service to them, which so beautifully and variously fills up the entire year, our thinking concerns itself only with the emperor. But not with the present emperor. [ ... ]
Our land is so huge, that no fairy tale can adequately deal with its size. Heaven hardly covers it all. And Peking is only a point, the imperial palace only a tiny dot. It’s true that, by contrast, throughout all the different levels of the world the emperor, as emperor, is great. But the living emperor, a man like us, lies on a peaceful bed, just as we do. It is, no doubt, of ample proportions, but it could be merely narrow and short. Like us, he sometime stretches out his limbs and, if he is very tired, yawns with his delicately delineated mouth. But how are we to know about that thousands of miles to the south, where we almost border on the Tibetan highlands? [ ... ] The empire is immortal, but the individual emperor falls and collapses. Even entire dynasties finally sink down and breathe their one last death rattle.
This shows that Kafka wrote about the Chinese empire and the emperor. In the German original text Kafka uses the words "Kaisertum" which was translated as "empire" and "Kaiser" which was translated as "emperor". In my opinion the first translation may be a bit misleading. "Empire" corresponds to the German "Reich" oder "Kaiserreich" which is a political unit whose head is the emperor. "Kaisertum" is not the same as "Kaiserreich", it is more a metaphysical idea and should perhaps better be translated by "emperorship".
Over the course of time the emperorship is incarnated by many individual emperors, men of flesh and blood. Read again
The empire is immortal, but the individual emperor falls and collapses.
The German orginal of the phrase "It’s true that, by contrast, throughout all the different levels of the world the emperor, as emperor, is great" is
Der Kaiser als solcher allerdings wiederum groß durch alle Stockwerke der Welt.
A better translation is
By contrast, however, the emperor as such is great throughout all the floors of the world.
The "contrast" refers to the imperial palace which is only a tiny dot. Here the "emperor as such" does not mean the individual emperor residing in the imperial palace - it means the emperor as an eternal role and idea.