Is the word Chink offensive???????????

I always thought the word chink was another name for chinese or Asian people. Actually I thought the term was an endearing term toward chinese and asian people. Where I come from, their are heardly any people of asian descent so I could'nt verify my umption. Because I got into a major problem last night. I went with my friends to a Chinese restaurant as I now call it. It had excellent food, so when I got the bill I told the waitor, this is the best chink restaurant in town. All of a sudden the waitor got an angry look on his face, dropped the bill on the floor and told the manager. The manager who is also chinese comes out and starts yelling at me and says he's going to take me to court. He says I'm not welcome in his restaurant and he kicks me out after having me pay for the bill. My friends were embarrased at mad at me for creating a scene. I ured them I did'nt know the word was offensive, but they did'nt believe me. So know I have my friends hating me and a potential lawsuit all over a word I did'nt think was offensive. So can some one please tell me if this word is offensive or not??