There IS a way they could have had Cato in the movie...
There's a way they could have had Cato in the movie and be more politically correct while still keeping the character.
In the first film the Chinese government is accused of being behind the theft of the diamond so to clear their names they send one of their best agents to stand by Clouseau and pose as a humble manservant while all the while keeping him safe and pretending to learn from Clouleau the martial arts (and of course besting him with secret superior knowledge).
He would pose as a humble manservant while all the while patiently enduring this fool while cracking the case!