Ya, I'm not surprised by that assessment, I've heard a lot about corruption in Chinese science. The Vice report was just based off of this study, which details the rise in quantitative output of peer-reviewed journal articles from China.
A few points: Firstly, there is good science that originate in China, just like there is bad science form the West. It just so happens that we in the West don't have the same incentives to cheat that they have (for various, complicated reasons). Second, quantity is nothing like quality. There has been a meteoric rise in the sheer number of journals in recent years, especially for-profit journals that will publish just about anything just to get submission fees. These journals have been accused many times of publishing sub-par work, and of pressuring authors to cite other articles from the publisher's other journals as a way to raise their impact factor (a quantitative measure of how often a journal is cited, which is often used as a proxy for the journal's importance). Third, just like drugs crossing the border, many smugglers can be caught, but many more get through the cracks. Something similar may be at play here.