This means Чем ты занимаешься? -- Literally, "With what are you busying yourself?" -- which is the normal Russian way of asking "Whatcha doin'?" or "What are you up to?", etc.

So, чем 'маешся is a super-slangy way of saying it, just as when English speakers say "Ahmanna-Gitzm lunch" instead of "I am going to get some lunch."

It's best to respond honestly -- "я иностранец" (m.) or "я иностранка" (f.). A few Russians will respond rudely to this and make jokes about stupid foreigners, but MOST Russians will be very helpful and will address you in standard, grammatically proper Russian, instead of using slang that's confusing to beginners.

ЗЫ: I'm curious to know how many Russians have heard "Ahmanna-Gitzm" from English speakers!