David Bowie and Iggy Pop wrote “China Girl” together in 1977 for Iggy’s album “The Idiot.” It didn’t chart for Iggy but it did a tremendous job when Bowie himself sang it for his 1983 album “Let’s Dance.” He reworked the song in order to help his bankrupted friend Iggy by sharing royalties and he succeeded - it reached number 2 on the UK charts and number 10 in US.
Paul Trynka, the author of David Bowie's biography Starman, claims the song was inspired by Iggy Pop's infatuation with Kuelan Nguyen, a beautiful Vietnamese woman. She was staying at the studio and Bowie encouraged the couple's relationship. It has also be argued that the song is about heroin addiction, as "China White" is slang for the drug.
The original Iggy Pop version of this song didn't have the famous oriental guitar riff that featured on Bowie's recording. Bowie's version was produced by Nile Rodgers, who came up with that guitar riff.
According to Rodgers, they had finished recording the song "Let's Dance," and Bowie game him a recording of the original "China Girl," explaining that it could be a hit if they could come up with a hook. Rodgers went literal, playing off the word "China" to come up with the riff, which he knew bordered on parody. Said Rodgers: "David was either going to hate this so much he would fire me, or he was going to get the comedic value of writing this silly little poppy thing."
Rodgers was nervous when he played Bowie the riff, but David loved it straightaway. With this riff and a much smoother production, the song sounded little like Iggy Pop's version, and the song became a hit.