The 19-year-old was venturing into the city centre for the first time in a year when she was assaulted outside Boots on Fargate.
A woman demanded to know if she was Chinese, hit her in the face and pulled her to the ground by the hair, it is claimed.
The attacker allegedly picked up a bottle but was intercepted by brave passersby and pinned down.
Police attended and the traumatised teenager was treated in hospital for eye injuries.
The force has fast-tracked the case as a hate crime.
Businessman Jerry Cheung, the head of the Chinese community in Sheffield, said it was ‘unacceptable’ and called for a city-wide campaign to combat a rise in racially-motivated attacks.
He added: “This is unacceptable in a civilised society. In the last year I’ve heard of numerous attacks, not just on Chinese students but Asians.
“We need the people who run the city to say it won’t be tolerated.”
The victim had been urged to go shopping by her mother, concerned at how little she had been out in the last year, he added.
They later contacted the Chinese consulate in Manchester. Officials wrote to South Yorkshire Police and asked Mr Cheung to get involved.
Mr Cheung added: “I spoke to the victim and she doesn’t understand what happened or why. It was very disturbing for her. Because of lockdown a lot of students are stressed anyway.
“I also emailed the universities and they really want to do something about this. They offer good support but I want to work on prevention.
“I would like to see a co-ordinated effort to develop a plan involving the council, universities, students and police.
“A lot of people are not aware this is happening.”
Meanwhile, the incident had gone viral on ‘thousands of student chat rooms’ and social media in China and was damaging the city’s peaceful reputation.
“A few people are saying we shouldn’t be going to Sheffield. They don’t know it’s one of the best places to study, live and work.”
The city has 6,000 Chinese students who pump £200m into the economy each year, money spent in local restaurants, bars, hairdressers and taxis, he added.
In a letter to Mr Cheung, Sgt Phil Mackey, based at Snig Hill Police Station, said he was shocked by the ‘violent and aggressive’ attack and had prioritised it due to its severity.
He wrote: ‘Please be assured that this incident is being treated as a hate crime and very seriously. We have now obtained the victim’s statements with the support of an interpreter and are progressing this matter to the CPS for review.
‘All hate crime incidents have to be referred to the CPS prior to any charges to ensure that the strongest case possible is built from a early stage and to try and reduce and potential delays further down the line. PC Argyle is prioritising this case over her other workload due to the severity of the incident’.