Living in Beijing right now(, study abroad program with sucky interwebs access), I can confirm that this is totally accurate. Another common example is 黑人牙垢 (Google it) aka, Darkie, now Darlie, toothpaste which is ubiquitous here.
Correction, not accurate, but representative. Such forms of racism are widely prevelant in China, but shure... they do seem to think it's possible, I would not be surprised if it was attempted. With the sorts of questions asked about skin colour( ' Does it come off in snow ? ', ' Have you showered ? ..like ever ? ") there's a reason the ad exists.