The article from Point 7 was a good read. I wouldn't go so far as "seriously keeps me up at night". I don't have much experience with Chinese tax law, but the way it describes China's actions are quite similar to how the IRS handles the underground economy here in the US. As far as the tax rates:

First, employers of China-based employees are supposed to pay employer taxes and benefits, and the American company is not doing so. These taxes and benefits vary from city to city but they usually total around 40 percent of the employee’s salary.

That seems to be the equivalent of US FICA, UI, disability, etc. taxes. 40% of employee's salary seems to be quite high there, but for a country like China, I'm not surprised.

Second, the American company should be withholding a certain percentage (around 15 percent) of its China-based employees’ wages, but is is not doing that either.

A 15% income tax on individuals isn't that bad, lower than what a lot of US taxpayers pay.

Third, the American company is doing business in China (it has employees in China and it is making sales there), and so it should be paying income tax on its profits (figure around 25 percent).

And a 25% corporate income tax seems reasonable to me as well.