The television advert for the Chevrolet Trax SUV, one of GM's latest car models, had been running in Canada since early April and was also posted onto Chevrolet's European website.
The offending advert features a song which includes the lyrics "In the land of Fu Manchu, the girls all now do the Suzie-Q, clap their hands in the centre of the floor, saying 'ching-ching, chop suey, swing some more.'"
The advert was replaced with a new version without the lyrics for Canadian broadcasters around a week ago and was also removed from all Chevrolet websites worldwide.
"We apologise for the use of inappropriate content. We are conducting a full review of our advertising approval process to ensure this does not happen again in the future."
The incident comes at a time when GM is seeking to maintain its dominance in the lucrative Chinese car market where its sales rose an annual 11.3 per cent last year to a record 2.84 million, according to the company.
Last month the US automaker announced it will this year launch 17 new or updated models in China, the world's largest car consumer, as it aims to make inroads into the country's luxury auto market.