I keep hearing this about Chinese companies but I've never actually met someone who has done this or have any concrete example beyond "oh I've heard that people do that", and I've talked to a lot of white expats in China. You've actually met these people? Did they explain any other details?

I ran into an old friend at my brother's wedding who was recently back from Beijing. He studied there and was put onto the rowing team without much active choice on his part. He took occasional jobs for a few hours as the western guy. He'd get picked up and given a briefcase to hold. Sometimes he'd be taken on a tour of a factory. Sometimes it was his job to take something out of the briefcase and give it to someone. At least once his employer was a local police officer. He said that the impression he had was that he was evidence of working with some overseas company.