I believe it.
Chinese people/culture look at things very differently than Americans. From the Chinese perspective, what you've described is thought of as being "clever" or "smart."
Chinese people have been playing these sorts of games for over 5000 years as a means for survival . . . and they are very good at it.
To the Chinese, spoken words mean absolutely nothing, and written words (e.g., a signed contract) mean next-to-nothing. They will lie right to your face and think nothing of it. From their perspective, YOU are unsophisticated and dumb for believing what they've said to you.
In order to effectively deal with a Chinese business, you MUST have some sort of leverage over them that you can implement whenever you get ready. If you don't, then you WILL get screwed over. If you don't have some leverage that will cause them serious pain, then it's just a matter of time before they jack you up.