What factors indicate that the motives are racial? I've lived in China for 2 years and I found elements of the Chinese government to be one of the most racist I've ever encountered. People of non Chinese decent cannot become citizens, even if they were born there, or one of their parents is Chinese they are deemed as alien residents. Furthermore, foreigners are still regularly subject to discriminate policies and unacceptable public behaviour, however things are getting better. Chinese bureacracies wouldn't hesitate to rip off some foreign organisation trying to functon within the Chinese system. But the biggest form of discrimination in China is directed at internal migrant workers, socially and economically.
I don't understand the specifics with the CASA/China issue, and if it is racial then that disgusts me. But I'm just trying to put things in perspective.