Granted, the guy did a bad thing in letting his VPN access go to a third party - but a smart company would see his potential.
He already handles multiple sub-contractors if we choose to call them that, and apparently manages to get them to perform well.
Some of the posts here suggests that the company should fire him, and use the Chinese dude themselves - but it is worth remembering that HE was the one finding this Chinese person, and he is the one doing quality control, to an above-average level.
Get him an official position as manager for a small overseas team of Chinese developers, and he could be worth a lot more to the company.