Chinese Fire Drill

I was reading an interview of James Howard Kunstler over at The Morning News (which was far less interesting than I anticipated) when I came across a phrase that sounded vaguely familiar, and to which I didn't know the exat mean of, so I went to look it up.

The phrase was Chinese fire drill. Here's an example of how it's used:

JHK: Yeah, but guess what? All they really succeeded in doing was offloading all the inconvenience from them to you, the public. Instead of them having to be inconvenienced by having to pay $60,000 in wages and medical benefits to a receptionist, all they did was make the public go through a Chinese fire drill every time they pick up the phone. I don’t think I am the only frustrated person in America. And that’s only one example.

The interviewer then asks what the phrase means as it's the second time Kunstler has used it. Here's the response:

JHK: A Chinese fire drill is a stunt that fraternity guys used to do—you pull up to a red light in a car, everybody in the car gets out and runs around the car four times and gets back into the car and drives away. It’s a kind of archetypal purposeless activity. And that’s what America is turning into. I also sometimes like to refer to America as becoming the Bulgaria of the Western Hemisphere.

The internet in general provides a few more explanations. Wikipedia for example, lists the above explanation, but also adds:

The term is also used as a figure of speech to mean any ineffective and chaotic exercise. It comes from a British tendency around the time of World War I to use the adjective Chinese as a slur, implying "confused, disorganized, or inferior". Today the expression may seem to have lost much of its insulting meaning and many people say it without realizing the offense it might cause to others.

But the The Phrase Finder, while including the original phrase, adds the following from Douglass Chappell:

It is my understanding that this phrase originated in the early 1900s. It came from an [sic] naval incident where a ship officered by the British and crewed by the Chinese set up a fire drill for [a] fire in the engine room. In the event of a fire the crew was to draw water from the starboard side, take [it] to the engine room and throw it on the fire. Another crew in the engine room was to take the thrown water and throw it over the port side [i.e. pump it out, then throw it overboard, to prevent flooding].

When the drill was called the first moments went according to plan then it got confused. The crew began drawing the water from the star[b]oard side and ru[n]ning over to the port side and throwing the water over, by-passing the the engine room completely.

Thus the expression "Chinese Fire Drill" entered our lexicon as meaning a large confused action by individuals accomplishing nothing.