Yes, racism definitely existed in China prior to contact with Europeans. If you are referring to the theory of "globalised racism" claims that certain sociologists and anthropologists, look no further as it is completely false.

The most glaring form of racism that existed was the tripartite relationship between Mongol, Manchu, and Han Chinese. Anti-Mongol and anti-Manchu sentiments were particularly prominent in the Ming and Qing dynasties. Mongols were portrayed to be barbaric and uncivilised (like Roman attitudes towards the Gauls, and European attitudes towards colonial Africa and Southeast Asia). The Dzungar genocide during the Qing dynasty, for example, was a reflection of such sentiments. Although mostly political rather than racial, racism nevertheless definitely existed before contact with the Europeans.

Imperial China also considered African and dark-skinned people to be barbaric and inferior. The Qing dynasty government in particular, while not involved in any form of institutionalised racial slave trade, nevertheless considered the tribal element to be inferior to Chinese culture. Interestingly, there are similar elements to the European racial discourse, such as inferior genetics. Ibn Warraq, Defending the West: a Critique of Edward Said’s Orientalism provides some of these examples.

Simply put, to state that racism is a European invention is complete nonsense.