Chinese slang (Cantonese) for white skin people. Literally translated, it means "ghost man", as in white like a ghost.
Yes, it's derogatory and I won't make any excuses for why us Chinese always call white folks that...it's pretty similar to how the Japanese always refer to foreigners as gaijin. However, given that China has historically been a rather closed country, when the first outsiders showed up many centuries ago, my ancestors thought that they had seen ghosts because they had never seen anybody else that wasn't Chinese.
You should note that the Chinese also use slang to refer to every race as ghosts. For example, when they refer to East Indians, they call them "Yun-Doh (India) Gwai (Ghost)". A black person would be called "Hark (Black) Gwai (Ghost)".
And knowing what I know, I'll probably get rocked on votes for putting this terminology up...but I figured that you should know when any of my Chinese brothers or sisters ever talk about you behind your back.