Even the poorest, laziest, and most below average chinese person who is on government aid and living overseas will still call non-chinese laowai, which in my mind shows a total lack of respect and complete ignorance.

That is very true. While transiting through a big and modern international airport and hub in a financially wealthy city in a very wealthy middle eastern country, I heard two chinese men, although perhaps men is not a good term to label these two racist, spineless individuals who were either in transit through this airport themselves or working in said city in said country and therefore should display some gratitude for having a well paid job and the good lifestyle it brings there, instead choose to label me and some other foreigners queueing up (a novel concept to mainland chinese males, but quite old in the rest of the world) laowais. I heard it mentioned even if I could not understand the rest of what was said, and so just glared at them after shouting " You are just as much a laowai in this airport as me!"

How a migrant worker chinese overseas can label smarter people in a country that hosts them as old outsiders is beyond me.