Legal experts have called for more education and stricter law enforcement to increase awareness of racial sensitivity after the release of an advertisement that caused outrage on social media.
The advertisement, for the Chinese detergent brand Qiaobi, went viral on the internet in China and overseas.
It featured a black man being transformed into a fair-skinned Chinese after being washed by the detergent in a washing machine.
Shanghai-based Leishang Cosmetics, which owns the brand, has halted distribution of the ad, which was shown on social media and in some movie theaters in China.
It posted a statement on its micro-blog account on Saturday to apologize to those who may have felt offended by the commercial.
On Chinese micro-blogging platform Sino Weibo, the news hashtag #controversy caused by laundry detergent# attracted nearly 3 million views, with many netizens leaving critical comments.
A user surnamed Chujianbaoji said: "The racial discrimination here couldn't be more obvious. The idea of washing a person in a washing machine is reckless."
Li Jun, vice-president in charge of the Qiaobi brand, said on Sunday: "The creative idea for the commercial was to add some comic drama by using artistic exaggeration. There was no intention of racial discrimination, and we didn't realize initially that it might lead to viewers getting the wrong impression.
"But we will take responsibility for any potential discomfort caused by it and apologize to those who may feel offended."
Liu Junhai, a professor of civil and commercial law at Renmin University of China, said the commercial reflects the lack of public awareness about racial issues in China.
"Chinese brands should stay alert because of fast-spreading social media," Liu said, adding that sensitivity about racial issues among advertisers and the public in China is not as high as in Western countries.
"The authorities should strengthen awareness through education and supervision of the advertising industry as well as punishing cases of discrimination," he said.
According to China's Advertisement Law, which was updated last year, any content containing or implying national, racial, religious and gender discrimination is prohibited in adverts, and incurs penalties.