It's interesting and historical, is what it is.
See also "Chinese gift exchange" which is common here in Canada.
I have a Canadian friend of Chinese parents who acknowledges that the term is racist in a quaint way (ie, that it implies that the Chinese will steal from each other) but thinks that people who complain about it are desperate to prove everyone else is a racist and are weird.
It's not the same as calling Chinese Chinks for example.

You're right though, an apology and an admittance of ignorance usually works wonders.
( Infidel , shit and wrong, Thu 23 Aug 2012, 13:00, Reply)