Liberal senator Ian Macdonald has been asked to apologise for linking Labor senator Penny Wong to Chinese billionaire Huang Xiangmo during Senate Estimates hearings on Tuesday.

Key points: Ian Macdonald said Labor senators were "very sensitive" about his "throwaway" remark

Ian Macdonald said Labor senators were "very sensitive" about his "throwaway" remark The names Wong and Huang are homophones in Cantonese, but not in Mandarin

The names Wong and Huang are homophones in Cantonese, but not in Mandarin The comments come after fresh revelations involving Chinese billionaire Huang Xiangmo

Senator Macdonald appeared to mix up the names "Wong" and "Huang", and asked if the Labor senator was related to Mr Huang, who has been at the centre of a joint Four Corners and The Age investigation into Chinese interference in Australia.

"Is it Wong is it? Any relation to Senator Wong?" he asked.

Labor senator Louise Pratt corrected him.

"No. Huang, H-U-A-N-G," she said.

Labor leader Bill Shorten sent out a statement to Chinese language media following the exchange, describing Senator Macdonald's comment as an "Asian slur".

"It's disgraceful that a Liberal senator would suggest that people of Asian background all have the same name or are all related," he said.

"Comments like this that have racist undertones must always be called out. There is never an excuse."

In Chinese, their names "Wong" and "Huang" are written the same way but they are pronounced differently depending on whether you speak Cantonese or Mandarin, respectively — "Huang" is one of the most common surnames in the world.

The remarks came in the wake of revelations from an investigation that found Mr Huang paid tens of thousands of dollars to former Liberal minister Santo Santoro in his bid to secure Australian citizenship.

The investigation also found then-immigration minister Peter Dutton approved then-Labor MP Sam Dastyari to conduct a private citizenship ceremony for Mr Huang's wife and two children.

Mr Huang's citizenship was ultimately denied after ASIO objected to his links to the Chinese Communist Party.

'Very thin skin'

Senator Pratt and fellow Labor senator Kimberley Kitching questioned Senator Macdonald's comment.

Labor senator Kimberley Kitching said the remark was "very inappropriate". ( ABC News: Ross Nerdal )

"Now these names are obviously dissimilar, but if you were attempting to smear Senator Wong, with an association of relations … with Mr Huang, then I think you should apologise to Senator Wong," Senator Kitching said.

Senator Pratt interjected, saying "just because they are Chinese".

"Hang on, hang on," Senator Macdonald said.

"People are throwing the name around and it sounded to me … as if you were saying Wong, and as a throwaway line, I said …"

Senator Pratt interjected, saying the remark was "very inappropriate".

"You are very sensitive about it," he responded.

Senator Kitching said it was a "desperate attempt to distract from the line of questioning" and accused Senator Macdonald of "smearing" Senator Wong.

"That is hardly a smear," he said.

"If Senator Wong has taken offence then I apologise to her, but if she does take offence she has a very thin skin."