I agree that it is a racist remark, but you'd be surprised how much explicit and accepted racism exists in SE Asia. When I lived there, if you were of Indian ethnicity, you were not allowed to live above the 4th floor in the HDB housing towers, which house nearly half the population. Singapore will also not allow ethnic Malays to have high ranks in its military. And very common you see Help Wanted posters around town that list the races they will allow for application.