The ad was broadcast on local Chinese stations and on state television's national sports channel before being pulled.
It showed James defeating a kung fu master, two cartoon women dressed in traditional Chinese attire and a pair of dragons, both considered sacred symbols in traditional Chinese culture.
The state administration for radio, film and television released a statement on its website saying where it was accused of insulting national dignity and blasphemy.
"The advertisement violates regulations that mandate that all advertisements in China should uphold national dignity and interest and respect the motherland's culture.
"It also goes against rules that require ads not to contain content that blasphemes national practices and cultures. The ad has received an indignant response from Chinese viewers," the state administration said.
The department did not say why the ad was considered offensive. But Ccommunist Party officials are sensitive about the use of Chinese cultural symbols by Westerners, and might have been especially angered that the Nike advertisement showed the foreigner winning the fight.
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