It is no more acceptable than shops that hire only white men. Can it be a common practice? Yes because human beings are often full of prejudices.
More importantly it is actually harmful to the company as you are missing on some of the best talent in your need to discriminate for things that are not relevant to the job. There are great while male programmers, great Indian programmers, great gay programmers, great Muslim programmers, great female programmers, great African-American programmers, etc. When you turn these people down simply for the their cultural background, you are losing the talent they could bring to make your company soar.
I have not seen many instances of a company that hired only Chinese people, but I have seen what happens in organizations that hire only white men. At first, you might get some really good people. But eventually you end up hiring the mediocre ( because you have used up the talent pool available in that particular group) when significantly better people are available, but were weeded out for irrelevant factors. You complain that you can't find someone to fill a particular specialized position because no one of the group applied.
Everyone in the organization starts to think very much alike because their backgrounds are identical, so the organization becomes stagnant and loses a lot of the creativity that having a diverse group of views will give you.
And once you start using one irrelevant factor to eliminate candidates, then it becomes easier and easier to introduce more limiting factors. So hiring only Chinese employees becomes hiring only Chinese men which become hiring only Chinese men who are immigrants becomes hiring only Chinese men who are immigrants who attended my particular university or came from my particular region of China.
Just as an example I sat down and made a list of the ten most capable people I have worked with in my 39 years in the workforce. I ended up with 2 African American Women (one of whom graduated from the number 1 university in the US), 3 White Males (one of whom has Asperger's), 1 Filipino woman, 1 Ethiopian Male, 2 Indians (1 male and 1 female), and 1 Vietnamese woman. The next 10,20, 30 , 100 people I have worked with would be similarly diverse. Note there weren't even any from my own group of white women (although there would be some in my next ten). Every one of the companies and government agencies these people have worked for was far better off for having hired them.
My bottom 10 would be somewhat diverse, but would have 6 white males because of all the places I worked earlier in my career where the discrimination ran strongly in favor of white men and they hired mediocre and incompetent men over highly qualified women and people of color. This is the real consequence of discrimination for a company. You end up tolerating the less qualified for the sake of keeping the group pure.
I have worked with 1000s of people through the years, no one group has a lock on being more competent or less competent. There are good and bad employees of all races, all religions, all genders, all educational backgrounds, all physical abilities. When you hire, you owe it to the company to stop considering irrelevant factors and hire the best people you can find no matter if they are in a wheelchair, or deaf, black, white, asian, gay, straight, Hindu, Muslim, Christian, male, female, trans, etc.