In recent years the word ‘‘laowai’‘ has begun to stir up controversy within the expatriate community in China. In this way ‘‘laowai’‘ is similar to how Americans view the Spanish word gringo and Westerners view the Japanese word gaijin or the Thai word farang. This is because many foreigners in China believe that ‘‘laowai’‘ is a derogatory term. This is due to the fact that some Chinese frequently shout out “Laowai”! to foreigners passing by, which may then be followed up with laughter and taunting.

— ‘Ang Mo’ in Singapore and ‘Lao Wai’ or ‘Gweilo’ in China - Offensive to Westerners? - Singapore Travel and Expats - Zimbio