The story itself is apparently apocryphal. Genghis Khan only conquered part of China during his lifetime and personally only spent a few years there before turning his attention towards Central Asia. The Mongols did commit massacres over the course of their conquests in China and elsewhere, but this was done as psychological warfare to crush resistance to their rule. Doing something as arbitrary as killing everyone over a certain height wouldn't have served any purpose, and would have been a massive undertaking.

There's also the fact that Chinese are not shorter on average than other East Asians, and that people from northern China (the part that was conquered by Genghis Khan) are taller on average than people from southern China (the part which came under Mongol rule later).