The passage in question:

"[his] breath became the wind and the clouds; his voice became the thunder; his left eye became the sun, and his right the moon; his four limbs and five torsos became the four poles and the five mountains; his blood became the rivers; his sinews became geographic features; his muscles became the soils in the field; his hair and beard became stars and planets; his skin and its hairs became grasses and trees; his teeth and bones became bronzes and jades; his essence and marrow became pearls and gemstones; his sweat became rain and lakes; and the various worms in his body, touched by the wind, became the black-haired commoners."

Cited from "A Cambridge History of Ancient China". He compares it to Indian myths regarding the caste system and claims "Perhaps only an elite as sublimely superior as China’s could have assigned to their raven-haired countrymen an origin so abject."

The implicit claim, with his usage of the term even for the Qin period, seems to be that this "elite" was not "black-haired", thus presumably caucasoid to the extent of having colored hair? This seems very far-fetched and "out there" considering the records we have don't mention light-haired eyes or hair often, if at all. Is this a case of severe mistranslation or is there anything to this?

Other passages: "While members of the ruling clans frequented the great buildings whose pounded earth foundations testify to ambitious architecture and gracious living, the ‘black-haired commoners’ lived in covered pits, used crude clay utensils, and laboured in the fields with Stone Age tools of wood and flint. "

"However demanding and intrusive, Qin rule was not indifferent to the welfare of the ‘black-haired commoners’; on the docility of the masses depended their mass mobilisation."

"Liu Bang (Han Gaozu) had risen from among the ranks of the ‘black-haired commoners’ to become emperor of all China"