It is if the argument to stop using it is some irrelevant point about some other location-based word that was used negatively only recently.

Something got shanghaied isn't a pejorative in the way that Trump acolytes use "China virus".

> irrelevant point about some other location-based word that was used negatively only recently.

Are you unaware of the Chinese Exclusion Act of 1882 -- which is exactly around the time that this term was popular and in common use?

The correlation is coincidental. It has nothing to do with that. https://en.wikipedia.org/wiki/Shanghaiing