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老外 lǎo wài is a very nice way to address foreigners in China and it’s commonly used by Chinese people. We could also call you 外国人 (wàiguórén), literally means "outside country person", which is much more formal.
Chinese are fond of 老外 because we think it shows an intimate feeling and it can narrow the distance between foreigners and us. In this way,
老外 may be similar to "Old Tom", "Old Jack" in English.
While the literal meaning of 老外 is "old outsiders" , some foreigners may regard it as an offensive word because they think it sounds impolite and has negative meaning with insult.
But it’s not true. For example, the word 老婆 (lǎopó), literally means "old woman", which actually means "wife" , is a very intimate way to address wife in oral Chinese.
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