Tournament organisers said the Spaniard had pulled out of the WTA 1000 tournament, citing a gastrointestinal illness, hours before her first-round match against Australian Ajla Tomljanovic.
Media outlets including Britain's The Telegraph newspaper reported earlier that Badosa had posted a photo on Instagram in which she appeared to imitate a Chinese face by placing chopsticks on the corners of her eyes.
The photo was taken last week in a restaurant in Beijing, where she reached the semi-finals of the China Open, and was posted online by her coach Pol Toledo.
It sparked a social media uproar and has since been deleted.
The world number 15 apologised for her behaviour in a post on social media platform X on Monday.
"Hey guys! Really sorry didn't know this was offensive towards racism. My mistake," she wrote.
"I take full responsibility. These mistakes will make me learn for next time. Hope you understand."
Badosa was replaced in the draw by lucky loser Lucia Bronzetti of Italy, who went on to beat Tomljanovic.