Welsh pupils equate being Welsh with being white, assuming that black people they come across must be English, according to a new report.
Many primary pupils questioned for the study, sponsored by the University of Wales, felt ethnic-minority pupils were excluded from mainstream Welsh culture.
When questioned by researchers, one 11-year-old boy said: "I'm glad I'm white because I don't want to be like a black person, because I'd probably be an English person then."
More than 100 pupils across Wales were interviewed. Many non-white pupils were reluctant to define themselves as Welsh. Instead, black or Asian pupils described themselves as British, using terms such as "British-Muslim", and referring to their country as Britain, rather than Wales.
The report, which appears in the November edition of Welsh journal Planet, states: "The avoidance of Welsh as an umbrella term might reflect ideas about alternative nationalities - that you cannot be simultaneously Pakistani and Welsh for example."
This effect is pronounced in Welsh-medium schools, which have a lower percentage of ethnic-minority pupils.
One Muslim pupil claimed that she would not go to a Welsh-medium school, because the lack of ethnic-minority pupils could lead to racism.
Similarly, a Welsh-medium pupil was asked to list the differences between her school and one where lessons are taught in English.
Despite living in an area of Wales with a 98-99 per cent white population, she replied that there would be black children in English-medium schools.
Chris Myant, director of the Commission for Racial Equality in Wales, believes that this attitude reflects the fact that few black and Asian people live outside big cities in Wales.
He said: "Welsh kids aren't all racist. But, in parts of Wales, black and Asian people are seen on the TV screen, not in real life.
"This is a wake-up call to those in education in Wales to make sure young people are equipped with the right attitudes to function in the real world."
The Welsh Assembly has said that it is committed to tackling discrimination in its schools.
A spokesman said: "We value diversity and the promotion of good relations between people of different racial groups. But more research is needed before any more definite views and policies may be formed."