"It's a deeply hurtful thing to have your children hear politicians making fun of their Chinese surname," she said.
"It's a deeply hurtful thing to have your children hear politicians insinuating that their Chinese sounding surname means their foreigners and don't belong here."
Dame Susan said despite former Prime Minister Jim Bolger being scoffed at for calling New Zealand an Asia Pacific nation in the 1990s, we are "most definitely" looking like one.
One in four Aucklanders are Asian, and more than one million people living in New Zealand were born overseas.
"Right now we need leaders and leadership; and I don't just mean politicians," she said.
"All of us need to show leadership when it comes to race relations."
Dame Susan announced that international peace activist and London bombing survivor Gill Hicks will be the keynote speaker at the Human Rights Commission at AUT University on September 9.
"Gill will be coming to share her story and her hopes for the future that are founded in empathy, peace and human rights."
Dame Susan said right now, migrants are being demonised in nations across the world.
"Right now is the time for New Zealanders to show leadership."
On the agenda for today's forum, which will run until 12.30pm at the Chinese New Settlers Services Trust in Panmure, includes Immigration's refugee quota and resettlement, the New Zealand Police migrant integration and settlement strategy and the work of the Auckland Council Ethnic People's Advisory Panel.
Council staff will also be giving an update on homelessness and emergency housing, including a new homelessness fund approved through the council's 10-year budget.
Labour Party MP Phil Twyford said Dame Susan's comments were "out of line".
"She either misunderstood or wilfully misreporting the debate."
"Countries all over the world are coming to grips with huge private investments from the peoples of the public of China over heating their housing markets. New Zealand needs to be able to discuss this, without the race relations commissioner trying to shut down the debates with allegation of racism."