Exactly, that's the very point for managers to keep their employees more permanently and to spare them the expense of hiring new staff, for example FTs from overseas. Why doesn't it happen in China to such a large extent? I think there are two reasons:
a. There are crappy businesses with narrow-minded and shortsighted managers that are out to make a quick buck and who are uneducated. Ethical business conduct and decent treatment of their employees is not profitable for them. Shitty treatment of staff, foreign teachers and students forms actually part of their business model. This phenomenon is not unique to China, you will find it all over the globe where such pretend "school" exist. Their crappy operators are the primary players in what we call the crappy world of ESL.

b. The Chinese system is not used to treat their own people decently. So, how can they be expected to treat other people decently when they raise to positions of power in such a system?

The old traditional Confucianist principle employed by Asian business leaders was something like this: The big boss would not put his staff in the street in case of a crisis and keep them under his "care". In return, employees owed their bosses absolute loyalty and would work overtime without asking any questions in good times, for example. This paternalistic approach once used to be a successful model and helped nations like Taiwan, Japan and Korea and their businesses grow and play an important part on the global market making them serious competitors of Western economies. This traditional model seems to have gone to some extent in those nations leaving larger masses of unemployed people behind who are now fully "disintegrated" and find it hard to survive. I know several people in Japan and Korea who suffer this fate and who are singles and unmarried for these reasons - a very unusual thing there!

In Mainland China, these old ideals in big business have never existed because there were no such businesses before all the reforms in the post-Mao periods and larger parts of these ancient Confucianist ideals were lost during the rule of th current political party in power while being retained outside Mainland China.

If you look at things this way, it will explain at least to some extent the existence of shitty pretend "schools" in Chinese ESL and all the crap in Chinese ESL that we have. In the end, they will shoot themselves in the foot if they continue to follow a model of unethical business conduct.

Great post