It is cultural not racism.  I personally feel that the Chinese culture has to open up and evolve.  Look at Malaysia.  After more than a century, many still can assimilate and hated by the natives.  Do we want to go the Thailand route where there is forced assimilation?

A westernized Chinese wouldn't encounter these issues.  My teenage daugther(ethnic Chinese) was housed with a group of mainlanders in a dorm and she hated it.  Not because she is a "racist" but because the mainlanders were quite rude and cliquey.  My older daugther went to Australia for 6 months to explore and work summer jobs.  Encountered little prejudices.  She got jobs like any other native Australians would and treated like anyone else.  The only jokes on her was the fact that she is a Yank.  Made fun of her North American accent and pronounciations.