NPR news had a recent report on the subject of doing business with Chinese manufacturers.
They pointed out that the business negotiations done in China are like a game of how much
the Chinese company can fool you or get away with. It is normal to have 2/3 of your product
shipped to you and 1/3 of the production going out the back door, pirated, sold on the world
market.
My career used to be designing for the souvenir market. Most manufacturers eventually
moved their production from the US to China. I don't work in that industry any more. One
US company owner blatantly told me he would just take an artists designs and send them to Hong
Kong, putting them on any product he wanted without paying the artist anything.
Here is a web site on negotiations with China.

http://chinesenegotiation.com/2007/06/18/negotiating-in-china-successfully-fool-me-once-shame-on-me/