Prime Minister Scott Morrison has greeted a woman in Mandarin but was left red-faced after she told him she was Korean.

Mr Morrison made the gaffe as he campaigned in Strathfield in Sydney's inner-west ahead of the Federal Election to be held on May 18.

He shook hands with a woman and said: 'Hello, how are you? ... Ni hao.'

'No, no, no, I'm Korean. I'm from the Korean community,' the woman politely replied.

Prime Minister Scott Morrison (right) greeted a woman in Mandarin, who told him she was Korean

Mr Morrison visited Strathfield in Sydney's inner-west and was seen taking selfies with people on the street

Strathfield forms part of the Liberal-held seat of Reid and is a suburb with a large concentration of Koreans

Strathfield is a suburb with a large concentration of Koreans.

The Prime Minister was unaware he had visited a Korean restaurant where he greeted workers in the kitchen and helped make cakes.

Many users took to Twitter to express their outrage following Mr Morrison's campaign trail gaffe.

'To assume they are Chinese is racist and quite stupid,' one user wrote.

'He did not know the lady were [sic] Korean! He is an embarrassment to Australia,' another wrote.

The Prime Minister visited a Korean restaurant, where he greeted workers in the kitchen and helped make cakes

Mr Morrison was accompanied by his wife Jenny and departing Liberal MP Craig Laundy

Mr Morrison was accompanied by his wife Jenny, departing MP Craig Laundy and Liberal candidate Fiona Martin.

Strathfield forms part of the Liberal-held seat of Reid on 4.7 per cent.

MP Craig Laundy said the Liberal Party must keep the seat of Reid in order to win the federal election and form a government.

Reid had always been held by Labor before Mr Laundy was elected in 2013.

Restaurant workers gifted the Prime Minister with a slice of green cake during his visit