You interpret his comment correctly, hence why he goes on to say that he cannot see how any racial stereotyping is not racist. As I have said before, such is true on a literal level, but since we are all adults, we can debate this in an adult fashion. For a comment to be "racist", with the meaning that it connotes, is to state that it is not only a negative comment, but one that has sensitive overtones.
I see. So you're now claiming, in effect, that not only are the Chinese incompetent at engineering, but that they are happy to be characterised as incompetent at engineering.
I was in a meeting yesterday where a Chinese colleague of mine was getting extremely unhappy about a situation where he was inferring a slur on the manufacturing ability of a Chinese company that he is dealing with very closely. There was no such slur intended, but he felt so sensitive on the issue that he found it very difficult to keep calm and discuss the problem dispassionately. I considered (not seriously) telling him that his arguments were falling apart like a Chinese motorbike, but I suspect he'd have stormed out of the room and then initiated a disciplinary complaint against me for racial harrassment. And if I'd said it, and he'd raised the complaint, I'd have had no defence, because he'd have been right.
So yes, your comment was not only a negative stereotype, but an offensive one, and one that, in a specific instance I can cite, would have caused serious offence. What is incredible is that you not only defend your behaviour, but that you accuse those who draw it to your attention as childish and irresponsible for doing so. But that seems to be your main technique for dismissing arguments you can't counter; claim that the arguers aren't serious.
I've been putting this off for a while, but I think it's time to give up on you, and on this thread. You stated in your OP that you believed that everyone who disagreed with you was either ignorant or a liar, so it should have been clear that you were simply planning to spread abuse under the guise of serious debate. I'm just disappointed with myself, now, that it took me so long to realise that you're no more than a long-winded Malcolm Kirkman clone.
Dave